TeleNav 2011 Annual Report Download - page 107

Table of Contents
TELENAV, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
netted against deferred tax assets. Upon adoption, we recognized no adjustment in the liability for unrecognized income tax benefits. During
fiscal 2011, the cumulative unrecognized tax benefit increased by $1.6 million. The following is a tabular reconciliation of the total amounts of
unrecognized tax benefits (in thousands):
Included in the balance of unrecognized tax benefits at June 30, 2010 and 2011 were $2.3 million and $3.7 million, respectively, that, if
recognized, would affect the effective tax rate.
We file income tax returns in the U.S. federal jurisdiction, California, various states, and foreign tax jurisdictions in which we have
subsidiaries. The statute of limitations remain open for fiscal 2000 through 2011 in U.S. and state jurisdictions, and for fiscal 2005 through 2011
in foreign jurisdictions. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated
in those early years which have been carried forward and may be audited in subsequent years when utilized. The Internal Revenue Service, or
IRS, is conducting an examination of our U.S. federal income tax returns for fiscal 2009 and 2010. As of June 30, 2011, the IRS has concluded
an audit of our fiscal 2008 U.S. federal income tax return which resulted in no adjustments that have a material impact to our financial
statements.
We believe it was reasonably possible that, as of June 30, 2011, the gross unrecognized tax benefits, could decrease (whether by payment,
release, or a combination of both) by as much as $1.1 million in the next 12 months. We recognize interest and penalties related to unrecognized
tax positions as part of our provision for federal, state and foreign income taxes. We had accrued $157,000 and $47,000 for the payment of
interest and penalties at June 30, 2011 and 2010, respectively.
11. Segment information
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated
regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.
Our chief operating decision maker is our chief executive officer. Our chief executive officer reviews financial information presented on a
consolidated basis, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating
financial performance. We have one business activity, the provision of LBS, and there are no segment managers who are held accountable for
operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, we operate in a single reporting
segment and operating unit structure.
103
June 30, 2011
June 30, 2010
Unrecognized tax benefit—Beginning
$
2,924
$
1,149
Increase in tax positions taken during the current period
1,578
1,308
Increase in tax positions taken during the prior period
96
467
Decrease in tax positions taken during the prior period
(78
)
—
Unrecognized tax benefit
—
Ending
$
4,520
$
2,924