Crucial 2012 Annual Report Download - page 267

22
INOTERA MEMORIES, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
(16) Income Tax
(a) The Company's earnings are subject to income tax at a statutory rate of 25% before 2010. However, based on
the amended Income Tax Act publicly announced on June 15, 2010, the statutory income tax rate has been
reduced further from 20% to 17% commencing from 2010. In 2009, 2010 and 2011, the Company is subject
to income tax at a statutory rate of 25%, 17% and 17%, respectively, and is also subject to the requirements
of the “Income Basic Tax Act” in calculating the basic tax. For the years ended December 31, 2009, 2010 and
2011, the components of income tax expense were as follows:
For the years ended December 31,
2009 2010 2011
Income tax expense - current $ 17,305 — —
Income tax benefit - deferred (17,305) — —
Income tax expense $ — — —
The components of deferred income tax expense for the years ended December 31, 2009, 2010 and 2011, were
as follows:
For years ended December 31,
2009 2010 2011
Investment tax credit $ 6,582,547 (272,860) 3,349,420
Loss carry forward (2,636,759) (2,008,726) (3,397,027)
Decrease (increase) in allowance for inventory devaluation and
obsolescence 353,537 (131,509) (94,730)
Allowance for doubtful accounts 13,580 90,066 2,942
Valuation (gain) loss on financial instruments (4,046) 75,567 33,362
Change in depreciation of idle and fixed assets 3,300 (38,966) —
Unrealized depreciation for tax filing (211,635) 190,663 (41,505)
(Unrealized) realized interest expenses (58,365) 58,365 —
Allowance for valuation of deferred tax assets (5,380,766) 1,035,022 221,001
Decrease (increase) in unrealized foreign exchange gain or loss 168,375 148,655 (22,532)
Realized unallocated overhead and labor — (48,177) (52,402)
Deferred income tax effect of change in income tax rate 1,150,951 900,476 —
Others 1,976 1,424 1,471
Deferred income tax expense $ (17,305) — —