McKesson 2010 Annual Report Download - page 82

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
76
Deferred tax balances consisted of the following:
March 31,
(In millions) 2010 2009
Assets
Receivable allowances $ 56 $ 70
Deferred revenue 107 170
Compensation and benefit related accruals 349 274
AWP litigation accrual 56 172
Loss and credit carryforwards 481 529
Other 235 357
Subtotal 1,284 1,572
Less: valuation allowance (97) (125)
Total assets $ 1,187 $ 1,447
Liabilities
Basis difference for inventory valuation and other assets $ (1,363) $ (1,286)
Basis difference for fixed assets and systems development costs (210) (207)
Intangibles (209) (238)
Other (63) (158)
Total liabilities (1,845) (1,889)
Net deferred tax liability $ (658) $ (442)
Current net deferred tax liability $ (975) $ (695)
Long-term net deferred tax asset 317 253
Net deferred tax liability $ (658) $ (442)
We have federal, state and foreign income tax net operating loss carryforwards of $122 million, $2.8 billion and
$201 million. The federal and state net operating losses will expire at various dates from 2011 through 2030.
Substantially all of our foreign net operating losses have indefinite lives. We believe that it is more likely than not
that the benefit from certain federal, state and foreign net operating loss carryforwards may not be realized. In
recognition of this risk, we have provided valuation allowances of $15 million and $45 million on the deferred tax
assets relating to these state and foreign net operating loss carryforwards. We also have federal and state capital loss
carryforwards of $40 million and $36 million. The federal and state net capital losses will expire at various dates
from 2012 through 2015. We believe that it is more likely than not that the benefit from these capital loss
carryforwards may not be realized. In recognition of this risk, we have provided valuation allowances of
$14 million and $2 million.
We also have domestic income tax credit carryforwards of $222 million which are primarily alternative
minimum tax credit carryforwards that have an indefinite life. However, we believe that it is more likely than not
that the benefit from certain state tax credits of $2 million may not be realized. In recognition of this risk, we have
provided a valuation allowance of $2 million. In addition, we have Canadian research and development credit
carryforwards of $14 million. The Canadian research and development credits will expire at various dates from
2018 to 2030.