Apple 1997 Annual Report Download - page 50
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indefinitely reinvested earnings, the Company provides for federal and state income taxes currently on undistributed earnings of foreign
subsidiaries.
Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the consolidated financial statement
carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled.
As of September 26, 1997, and September 27, 1996, the significant components of the Company's deferred tax assets and liabilities were:
The increase in net deferred tax assets of $51 million in 1997 is primarily the result of reclassifying certain benefits of tax losses and credits
from other current assets to deferred tax assets in the consolidated balance sheet.
As of September 26, 1997, the Company had operating loss carryforwards for tax purposes of approximately $451 million, which expire
principally in 2011 and 2012. Most of the remaining benefits from tax losses and credits do not expire.
The net change in the total valuation allowance in 1997 was an increase of $204 million, which is net of a $4 million adjustment related to the
acquisition of NeXT.
47
SEPTEMBER 26, SEPTEMBER 27,
1997 1996
--------------- ---------------
(IN MILLIONS)
Deferred tax assets:
Accounts receivable and inventory reserves.................... $ 151 $ 105
Accrued liabilities and other reserves........................ 126 139
Basis of capital assets and investments....................... 103 82
Tax losses and credits........................................ 315 175
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Total deferred tax assets..................................... 695 501
Less: Valuation allowance....................................... 218 14
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Net deferred tax assets......................................... 477 487
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Deferred tax liabilities:
Unremitted earnings of subsidiaries........................... 410 467
Other......................................................... 7 11
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Total deferred tax liabilities.................................. 417 478
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Net deferred tax asset.......................................... $ 60 $ 9
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