US Bank 2004 Annual Report Download - page 64
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Please find page 64 of the 2004 US Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.management to make subjective judgments concerning reported in other assets or other liabilities on the
estimates of how the acquired assets will perform in the Consolidated Balance Sheet. In estimating accrued taxes, the
future using valuation methods including discounted cash Company assesses the relative merits and risks of the
flow analysis. Additionally, estimated cash flows may appropriate tax treatment considering statutory, judicial and
extend beyond ten years and, by their nature, are difficult regulatory guidance in the context of the tax position.
to determine over an extended timeframe. Events and Because of the complexity of tax laws and regulations,
factors that may significantly affect the estimates include, interpretation can be difficult and subject to legal judgment
among others, competitive forces, customer behaviors and given specific facts and circumstances. It is possible that
attrition, changes in revenue growth trends, cost structures, others, given the same information, may at any point in
technology, changes in discount rates and specific industry time reach different reasonable conclusions regarding the
and market conditions. In determining the reasonableness of estimated amounts of accrued taxes.
cash flow estimates, the Company reviews historical Changes in the estimate of accrued taxes occur
performance of the underlying assets or similar assets in an periodically due to changes in tax rates, interpretations of
effort to assess and validate assumptions utilized in its tax laws, the status of examinations being conducted by
estimates. various taxing authorities, and newly enacted statutory,
In assessing the fair value of reporting units, the judicial and regulatory guidance that impact the relative
Company may consider the stage of the current business merits and risks of tax positions. These changes, when they
cycle and potential changes in market conditions in occur, affect accrued taxes and can be significant to the
estimating the timing and extent of future cash flows. Also, operating results of the Company. Refer to Note 21 of the
management often utilizes other information to validate the Notes to Consolidated Financial Statements for additional
reasonableness of its valuations including public market information regarding income taxes.
comparables, and multiples of recent mergers and
acquisitions of similar businesses. Valuation multiples may CONTROLS AND PROCEDURES
be based on revenue, price-to-earnings and tangible capital Under the supervision and with the participation of the
ratios of comparable public companies and business Company’s management, including its principal executive
segments. These multiples may be adjusted to consider officer and principal financial officer, the Company has
competitive differences including size, operating leverage evaluated the effectiveness of the design and operation of its
and other factors. The carrying amount of a reporting unit disclosure controls and procedures (as defined in
is determined based on the capital required to support the Rules 13a-15(e) and 15d-15(e) under the Securities
reporting unit’s activities including its tangible and Exchange Act of 1934 (the ‘‘Exchange Act’’)). Based upon
intangible assets. The determination of a reporting unit’s this evaluation, the principal executive officer and principal
capital allocation requires management judgment and financial officer have concluded that, as of the end of the
considers many factors including the regulatory capital period covered by this report, the Company’s disclosure
regulations and capital characteristics of comparable public controls and procedures were effective to ensure that
companies in relevant industry sectors. In certain information required to be disclosed by the Company in
circumstances, management will engage a third-party to reports that it files or submits under the Exchange Act is
independently validate its assessment of the fair value of its recorded, processed, summarized and reported within the
business segments. time periods specified in Securities and Exchange
The Company’s annual assessment of potential Commission rules and forms.
goodwill impairment was completed during the second During the most recently completed fiscal quarter, there
quarter of 2004. Based on the results of this assessment, no was no change made in the Company’s internal controls
goodwill impairment was recognized. over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) that has materially
Income Taxes The Company estimates income tax expense
affected, or is reasonably likely to materially affect, the
based on amounts expected to be owed to various tax
Company’s internal control over financial reporting.
jurisdictions. Currently, the Company files tax returns in
The annual report of the Company’s management on
approximately 140 federal, state and local domestic
internal control over financial reporting is provided on
jurisdictions and 6 foreign jurisdictions. The estimated
page 106. The attestation report of Ernst & Young LLP, the
income tax expense is reported in the Consolidated
Company’s independent accountants, regarding the
Statement of Income. Accrued taxes represent the net
Company’s internal control over financial reporting is
estimated amount due or to be received from taxing
provided on page 107.
jurisdictions either currently or in the future and are
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