US Bank 2006 Annual Report Download - page 62

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companies in relevant industry sectors. In certain judicial and regulatory guidance that impact the relative
circumstances, management will engage a third-party to merits and risks of tax positions. These changes, when they
independently validate its assessment of the fair value of its occur, affect accrued taxes and can be significant to the
business segments. operating results of the Company. Refer to Note 18 of the
The Company’s annual assessment of potential Notes to Consolidated Financial Statements for additional
goodwill impairment was completed during the second information regarding income taxes.
quarter of 2006. Based on the results of this assessment, no
CONTROLS AND PROCEDURES
goodwill impairment was recognized.
Under the supervision and with the participation of the
Income Taxes The Company estimates income tax expense
Company’s management, including its principal executive
based on amounts expected to be owed to various tax
officer and principal financial officer, the Company has
jurisdictions. Currently, the Company files tax returns in
evaluated the effectiveness of the design and operation of its
approximately 143 federal, state and local domestic
disclosure controls and procedures (as defined in
jurisdictions and 9 foreign jurisdictions. The estimated
Rules 13a-15(e) and 15d-15(e) under the Securities
income tax expense is reported in the Consolidated
Exchange Act of 1934 (the ‘‘Exchange Act’’)). Based upon
Statement of Income. Accrued taxes represent the net
this evaluation, the principal executive officer and principal
estimated amount due or to be received from taxing
financial officer have concluded that, as of the end of the
jurisdictions either currently or in the future and are
period covered by this report, the Company’s disclosure
reported in other assets or other liabilities on the
controls and procedures were effective.
Consolidated Balance Sheet. In estimating accrued taxes, the
During the most recently completed fiscal quarter, there
Company assesses the relative merits and risks of the
was no change made in the Company’s internal controls
appropriate tax treatment considering statutory, judicial and
over financial reporting (as defined in Rules 13a-15(f) and
regulatory guidance in the context of the tax position.
15d-15(f) under the Exchange Act) that has materially
Because of the complexity of tax laws and regulations,
affected, or is reasonably likely to materially affect, the
interpretation can be difficult and subject to legal judgment
Company’s internal control over financial reporting.
given specific facts and circumstances. It is possible that
The annual report of the Company’s management on
others, given the same information, may at any point in
internal control over financial reporting is provided on
time reach different reasonable conclusions regarding the
page 61. The attestation report of Ernst & Young LLP, the
estimated amounts of accrued taxes.
Company’s independent accountants, regarding the
Changes in the estimate of accrued taxes occur
Company’s internal control over financial reporting is
periodically due to changes in tax rates, interpretations of
provided on page 63.
tax laws, the status of examinations being conducted by
various taxing authorities, and newly enacted statutory,
60 U.S. BANCORP