Apple 1994 Annual Report Download - page 38

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The foreign provision for income taxes is based on foreign pretax earnings of approximately $474 million, $416 million, and $611 million in
1994, 1993, and 1992, respectively. The tax benefit credited directly to common stock as a result of compensation expense attributable to
employee stock option and purchase plans recognized differently for financial reporting and tax purposes was $11 million in 1994.
As discussed in the Summary of Significant Accounting Policies, the Company adopted FAS 109 effective as of the beginning of the fiscal year
ended September 30, 1994. Prior to 1994, the Company accounted for income taxes under the provisions of APB Opinion No. 11. Under FAS
109, deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying
amounts of assets and liabilities and their respective tax bases.
At September 30, 1994, the significant components of the Company's deferred tax assets and liabilities were as follows:
The net change in the total valuation allowance for the year ended September 30, 1994, was an increase of $11 million.
35
Income Taxes
The provision for income taxes consists of the following:
(In thousands)
FAS 109 Method APB 11 Method
1994 1993 1992
Federal:
Current $ 60,757 $ 13,637 $ 108,512
Deferred 19,673 (23,757) 100,355
80,430 (10,120) 208,867
State:
Current 5,769 3,144 26,935
Deferred 20,352 633 13,891
26,121 3,777 40,826
Foreign:
Current 71,095 39,512 65,144
Deferred 12,462 19,901 10,232
83,557 59,413 75,376
Provision for income taxes $ 190,108 $ 53,070 $ 325,069
(In thousands)
September 30, 1994
Deferred tax assets:
Accounts receivable and inventory reserves $ 140,842
Accrued liabilities and other reserves 125,402
Basis of capital assets and investments 66,256
Total deferred tax assets 332,500
Less: Valuation allowance 10,948
Net deferred tax assets 321,552
Deferred tax liabilities:
Unremitted earnings of subsidiaries 656,806
Other 28,791
Total deferred tax liabilities 685,597
Net deferred tax liability $ 364,045