Wendy's 2013 Annual Report Download - page 120

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THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
2008-2011 Canada Income Tax Provision - Corrections Discovered in Deferred Tax Process
The Company’s review further determined that there were discrepancies between the required and actual
deferred tax balances at the end of 2011. While the Company believed the differences originated in the purchase
accounting for the Wendy’s merger on September 29, 2008, it was unable to definitively conclude that the differences
related to purchase accounting and/or to what prior period the errors were attributable. As a result, an increase to
deferred tax benefit and a decrease in deferred tax liabilities of $2,100 was recorded in 2012.
Correction to Prior Years’Depreciation of Properties
During 2012, the Company identified two accounting issues in its depreciable assets, relating to (1) the
depreciation of certain properties and (2) the accelerated depreciation for Image Activation restaurants.
Depreciation of Properties
Properties, primarily construction related assets, which had been placed in service in 2010 and 2011 had not
been depreciating until 2012. Depreciation of $1,900 which should have been recorded in 2010 and 2011 was
recorded in 2012.
Accelerated Depreciation of Properties
During the preliminary stages of our Image Activation program in 2011, Wendy’s remodeled 10 restaurants.
The Company accelerated depreciation for certain properties which were anticipated to be disposed of as a result of
the remodel process. In connection with a further review of properties added as part of the Image Activation remodel
process, the Company determined it had not recorded accelerated depreciation on certain properties at the remodeled
restaurants which were disposed of in 2011. Accelerated depreciation of $2,100 which should have been recorded in
2011 was recorded in 2012.
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