Logitech 2014 Annual Report Download - page 272

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 7 — Income Taxes (Continued)
Deferred income tax assets and liabilities consist of the following (in thousands):
March 31,
2014 2013(1)
As Revised
Deferred tax assets:
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,421 $ 13,279
Tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,241 13,746
Accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,153 44,700
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,781 4,453
Share-based compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,304 17,147
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,900 93,325
Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,872) (6,014)
Gross deferred tax assets after valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . 86,028 87,311
Deferred tax liabilities:
Acquired intangible assets and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,436) (11,951)
Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,436) (11,951)
Deferred tax assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $77,592 $ 75,360
(1) Deferred tax assets and liabilities as of March 31, 2013 were adjusted to reflect the tax impact from the
revision of the financial statement. In addition, during fiscal year 2014, the Company determined that a
deferred tax liability related to U.S. flow-through investment of $0.9 million was erroneously presented as
a deferred tax asset associated with “Accruals” as of March 31, 2013. The amount was properly reclassed
from “Accruals” to “Acquired intangible assets and others” above. The reclassification adjustment has no
impact in the Company’s Consolidated Statement of Operations, Consolidated Balance Sheet and Statement
of Cash Flows.
Management regularly assesses the ability to realize deferred tax assets recorded in the Company’s entities
based upon the weight of available evidence, including such factors as recent earnings history and expected future
taxable income. In the event that the Company changes its determination as to the amount of deferred tax assets
that can be realized, the Company will adjust its valuation allowance with a corresponding impact to the provision
for income taxes in the period in which such determination is made.
The Company had a valuation allowance of $4.9 million at March 31, 2014, decreased from $6.0 million at
March 31, 2013 primarily due to decrease in valuation allowance of $1.3 million for foreign tax credit carryforwards
in the United States. The Company elected to deduct foreign taxes in lieu of tax credits in its fiscal year 2013
federal tax return in the United States. The Company had a valuation allowance of $2.6 million as of March 31,
2014 against deferred tax assets in the state of California of the United States. The remaining valuation allowance
primarily represents $1.7 million for capital loss carryforwards in the United States and $0.6 million for various tax
credit carryforwards. The Company determined that it is more likely than not that the Company would not generate
sufficient taxable income in the future to utilize such deferred tax assets.
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