Nautilus 2014 Annual Report Download - page 53

Deferred Income Taxes
Individually significant components of deferred income tax assets (liabilities) were as follows (in thousands):
Our net deferred income tax asset (liability) was recorded on our Consolidated Balance Sheets as follows (in thousands):
The table of deferred tax assets and liabilities shown above does not include certain deferred tax assets as of December 31, 2014 and 2013, that
arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting. Instead, equity
will be increased by $0.8 million
if and when such deferred tax assets are ultimately realized. We use tax law ordering when determining when
excess tax benefits have been realized.
We account for income taxes based on the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. We
have recorded a valuation allowance to reduce our deferred income tax assets to the amount we believe is more likely than not to be realized.
Evaluating the need for, and amount of, a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis
of all available evidence on a jurisdiction-by-
jurisdiction basis. Such judgments require us to interpret existing tax law and other published
guidance as applied to our circumstances. As part of this assessment, we consider both positive and negative evidence. The weight given to the
potential effect of positive and negative evidence must be commensurate with the extent to which the strength of the evidence can be objectively
verified.
During 2008, we determined that it was no longer more likely than not that the tax benefits from the existing U.S. deferred tax assets would be
realized due to the substantial amount of the cumulative accounting losses realized in the recent years in the U.S.
46
December 31,
2014 2013
Deferred income tax assets:
Accrued liabilities
$
3,510
$
3,230
Allowance for doubtful accounts
33
20
Inventory valuation
377
312
Capitalized indirect inventory costs
295
159
Stock-based compensation expense
558
376
Net operating loss carryforward
19,742
35,635
Basis difference on long-lived assets
3,289
4,412
Credit carryforward
4,565
3,422
Other
339
332
Gross deferred income tax assets
32,708
47,898
Valuation allowance
(6,156
)
(12,944
)
Deferred income tax assets, net of valuation allowance
26,552
34,954
Deferred income tax liabilities:
Prepaid advertising
(467
)
(793
)
Other prepaids
(696
)
(592
)
Basis difference on long-lived assets
(3,355
)
(2,938
)
Undistributed earnings of foreign subsidiaries
(179
)
(177
)
Other
(1
)
(288
)
Deferred income tax liabilities
(4,698
)
(4,788
)
Net deferred income tax asset
$
21,854
$
30,166
December 31,
2014 2013
Current deferred income tax assets
$
12,368
$
4,441
Non-current deferred income tax assets
9,546
25,725
Other long-term liabilities
(60
)
—
Net deferred income tax asset
$
21,854
$
30,166