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Trueblood Case 13-11 Lol

In: Business and Management

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Trueblood Case 13-11: Income Taxes – LOL

Case Facts: * Transaction Date: June 30, 2011 * Acquirer: LOL * Acquired: Sundance * LOL Tax Related Balances as of December 31, 2010 * $150mm Deferred Tax Asset * $105mm Valuation Allowance * Sundance Tax Related Balances as of Acquisition Date * $200mm Deferred Tax Asset * $200mm Valuation Allowance * Acquisition Date Decisions * Remove LOL Valuation Allowance of $105mm * Remove $150mm Valuation Allowance from Sundance books * Subsequent Information as of December 31, 2012 * Sundanced Valuation Allowance is unnecessary ($50mm)

Guidance Summary: * Both IAS 12 and ASC 740 “require income taxes to be accounted for using an asset and liability approach that recognizes current tax effects and expected future tax consequences of events that have been recognized for financial or tax reporting (i.e., deferred taxes) each period.” * The overall approaches are similar, but there are several significant differences * in the treatment of uncertain tax positions, * deferred tax assets and the related valuation allowances, * offsetting and classification, * deferred tax effects on outside basis of investments, and * disclosures.

| ASC740 | IAS12 | Recognition | More likely than not | Probable | Calculation | Enacted tax rates must be used | Enacted or ―substantively enacted‖ tax rates as of the balance sheet date must be used. | Classification / Presentation | Current or non-current classification, based on the nature of the related asset or liability, is required. | All amounts classified as non-current in the balance sheet. | Valuation Allowance | An entity records a full deferred tax asset and then reduces that recorded asset by a valuation allowance if realization of the asset is “more…...

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...University Relations Deloitte Foundation Faculty Resources Faculty and Ph.D. Support Life, Inc. Student Events The Trueblood Case Studies DOWNLOAD For a complete index of Cases and Addendum summary please click the download button above. The Trueblood Series cases and solutions are available in Adobe PDF format below. Solutions are password protected for faculty use only. Access to solutions by other unauthorized individuals is strictly prohibited. To find out how to obtain access to the case solutions, please contact us via e-mail or mail a request on your school letterhead to: Deloitte Foundation Ten Westport Road Wilton, CT 06897 Due to the issuance of certain new accounting literature, changes in the status of ongoing projects during the last year, or evolution of practice, addenda have been added to a number of the existing cases. To see if a case has been updated, please click on the download button above. Because an addendum may affect the solution for a case study, you should review the updated solutions. The nonexclusive right to reproduce material contained in these cases without explicit written permission is hereby granted to faculty in connection with classroom use, academic research, and other educational endeavors of a not-for-profit nature. Deloitte Image 2013 Case Index Case: 13-1 Refer-a-friend gift card Download: Case | Solution Type: Revenue recognition Subject: Determine the appropriate accounting for discounts......

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