Voya 2013 Annual Report Download - page 194

Income Taxes
Valuation Allowances
We use certain assumptions and estimates in determining the income taxes payable or refundable for the
current year, the deferred income tax liabilities and assets for items recognized differently in our financial
statements from amounts shown on our income tax returns, and the federal income tax expense. Determining
these amounts requires analysis and interpretation of current tax laws and regulations, including the loss
limitation rules associated with change in control. We exercise considerable judgment in evaluating the amount
and timing of recognition of the resulting income tax liabilities and assets. These judgments and estimates are
reevaluated on a periodic basis as regulatory and business factors change.
We evaluate and test the recoverability of deferred tax assets. Deferred tax assets represent the tax benefit of
future deductible temporary differences and operating loss and tax credit carryforwards. Deferred tax assets are
reduced by a valuation allowance if, based on the weight of evidence, it is more likely than not that some portion,
or all, of the deferred tax assets will not be realized. Considerable judgment and the use of estimates are required
in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In
evaluating the need for a valuation allowance, we consider many factors, including:
• The nature and character of the deferred tax assets and liabilities;
• The nature and character of income by life and non-life subgroups;
• The recent cumulative book income (loss) position after adjustment for permanent differences;
• Taxable income in prior carryback years;
• Projected future taxable income, exclusive of reversing temporary differences and carryforwards;
• Projected future reversals of existing temporary differences;
• The length of time carryforwards can be utilized;
• Prudent and feasible tax planning strategies we would employ to avoid a tax benefit from expiring
unused; and
• Tax rules that would impact the utilization of the deferred tax assets.
We have assessed whether it is more likely than not that the deferred tax assets will be realized in the future.
In making this assessment, we considered the available sources of income and positive and negative evidence
regarding our ability to generate sufficient taxable income to realize our deferred tax assets, which include net
operating loss carryforwards (“NOLs”), capital loss carryforwards and tax credit carryforwards.
Positive evidence includes a recent history of earnings, projected earnings attributable to our ongoing
insurance and investment businesses, plans or the ability to sell certain assets and streams of revenues, plans to
reduce future projected losses by reduction of sales of certain products and predictable patterns of loss and
income recognition. Negative evidence includes a history of operating losses in certain life businesses, large
losses in the non-life business and the potential unpredictability of certain components of future projected taxable
income.
We use judgment in considering the relative impact of negative and positive evidence. The weight given to
the potential effect of negative and positive evidence is commensurate with the extent to which it can be
objectively verified. The more negative evidence that exists (a) the more positive evidence is necessary and
(b) the more difficult it is to support a conclusion that a valuation allowance is not needed for some portion of or
the entire deferred tax asset.
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