Seagate 2009 Annual Report Download - page 97

Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The significant components of the Company's deferred tax assets and
liabilities were as follows:
At the beginning of fiscal year 2010, the Company established deferred tax liabilities associated with accounting changes relating to
convertible debt pursuant to ASC 470-20 (see Note 5). Fiscal year 2009 amounts in the table above for deferred tax liabilities, valuation
allowance, current assets and non-current assets were restated to reflect the retrospective impact of the ASC 470-20 accounting change.
At July 2, 2010, the deferred tax asset valuation allowance was approximately $1.2 billion reflecting a decrease of approximately
$133 million in fiscal year 2010. The decrease in valuation allowance includes a $55 million reversal of a portion of the U.S. valuation
allowance recorded in fiscal year 2009 associated
91
Fiscal Years Ended
(Dollars in millions)
July 2,
2010
July 3,
2009
(1)
Deferred tax assets
Accrued warranty
$
137
$
162
Inventory valuation accounts
54
44
Receivable reserves
16
16
Accrued compensation and benefits
147
132
Depreciation
145
140
Restructuring accruals
15
17
Other accruals and deferred items
51
67
Net operating losses and tax credit carry
-
forwards
1,085
1,151
Other assets
12
12
Total Deferred tax assets
1,662
1,741
Valuation allowance
(1,164
)
(1,297
)
Net Deferred tax assets
498
444
Deferred tax liabilities
Unremitted earnings of certain non-U.S.
entities
(3
)
(1
)
Acquired intangible assets
(3
)
(11
)
Debt discount
(10
)
(16
)
Depreciation
(9
)
—
Total Deferred tax liabilities
(25
)
(28
)
Net Deferred tax assets
473
416
Deferred taxes on inter
-
company
transactions
32
53
Total Deferred tax assets
$
505
$
469
As Reported on the Balance Sheet
Current assets
—
Deferred income taxes
$
118
$
97
Non
-
current assets
—
Deferred income taxes
395
372
Other current liabilities
(8
)
—
Total Deferred income taxes
$
505
$
469
(1) As adjusted due to a required change in the accounting for convertible debt instruments implemented in the
first quarter of fiscal year 2010, applied on a retrospective basis.