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68 2015 Form 10-K | H&R Block, Inc.
The significant components of deferred tax assets and liabilities are reflected in the following table:
(in 000s)
As of April 30, 2015 2014
Gross deferred tax assets:
Accrued expenses $ 9,301 $ 11,541
Deferred revenue 32,392 22,511
Allowance for credit losses and related reserves 107,554 115,145
Internally-developed software 46,376 —
Valuation allowance (15,735) (10,837)
Current 179,888 138,360
Deferred and stock-based compensation 21,776 21,348
Deferred revenue 7,212 8,090
Net operating loss carry-forward 27,285 21,434
Federal tax benefits related to state unrecognized tax benefits 26,862 28,601
Other 7,278 9,861
Valuation allowance (9,202) (8,339)
Noncurrent 81,211 80,995
261,099 219,355
Gross deferred tax liabilities:
Prepaid expenses (5,621) (3,033)
Current (5,621) (3,033)
Property and equipment (25,589) (28,610)
Mortgage-related investment (1,674) (15,441)
Intangibles (93,700) (59,881)
Noncurrent (120,963) (103,932)
Net deferred tax assets $ 134,515 $ 112,390
Our valuation allowance on deferred tax assets increased $5.7 million from $19.2 million at April 30, 2014, to $24.9
million at April 30, 2015. The increase in the valuation allowance related to deferred tax assets for foreign tax credit
carry-forwards and foreign net operating losses.
Certain of our subsidiaries file stand-alone returns in various states and foreign jurisdictions, and others join in
filing consolidated or combined returns in such jurisdictions. As of April 30, 2015, we had net operating losses (NOLs)
in various states and foreign jurisdictions. The amount of state NOLs vary by taxing jurisdiction. We maintain a deferred
tax asset of $27.3 million for the tax effects of such losses and a valuation allowance of $17.5 million for the portion
of such losses that, more likely than not, will not be realized. If not used, the NOLs will expire in varying amounts
during fiscal years 2016 through 2033.
We intend to indefinitely reinvest the earnings of our foreign subsidiaries; therefore, no provision has been made
for income taxes that might be payable upon remittance of such earnings. The amount of unrecognized tax liability
on these foreign earnings, net of expected foreign tax credits, is less than $10 million as of April 30, 2015.