Target 2015 Annual Report Download - page 59

€
Net€Deferred€Tax€Asset/(Liability)
(millions)
January 30,
2016
January 31,
2015
Gross deferred tax assets:
Accrued and deferred compensation $476 $531
Accruals and reserves not currently deductible 323 316
Self-insured benefits 199 223
Prepaid store-in-store lease income 270 —
Other 90 176
Total gross deferred tax assets 1,358 1,246
Gross deferred tax liabilities:
Property and equipment (1,790)(1,946)
Inventory (190)(307)
Other (168)(123)
Total gross deferred tax liabilities (2,148)(2,376)
Total net deferred tax liability $(790) $ (1,130)
In 2014, we incurred a tax effected capital loss of $112 million within discontinued operations from our exit from Canada.
At that time, we neither had nor anticipated sufficient capital gains to absorb this capital loss, and established a full
valuation allowance within discontinued operations. In 2015, we released the entire $112 million valuation allowance
due to a capital gain resulting from the sale of our pharmacy and clinic businesses. The benefit of the valuation
allowance release is recorded in continuing operations.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences
between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted income tax rates in effect for the year the temporary differences
are expected to be recovered or settled. Tax rate changes affecting deferred tax assets and liabilities are recognized
in income at the enactment date.
We have not recorded deferred taxes when earnings from foreign operations are considered to be indefinitely invested
outside the U.S. These accumulated net earnings relate to certain ongoing operations and were $685 million at
January€30, 2016 and $328 million at January€31, 2015. It is not practicable to determine the income tax liability that
would be payable if such earnings were repatriated.
In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17
amended ASC 740, Income Taxes, to simplify the presentation of deferred taxes by requiring deferred tax assets and
liabilities be classified as noncurrent on the balance sheet.€ We have retrospectively adopted this ASU for the year
ended January 30, 2016. As a result, $289 million and $188 million of current deferred tax assets from continuing
operations have been reclassified from other current assets to deferred income taxes in our Consolidated Statements
of Financial Position as of January 30, 2016 and January 31, 2015, respectively, and $74 million and $274 million of
current deferred tax assets from discontinued operations have been reclassified from assets of discontinued operations
to noncurrent assets of discontinued operations, respectively.
We file€a U.S. federal income tax return and income tax returns in various states and foreign jurisdictions. The U.S.
Internal Revenue Service has completed exams on the U.S. federal income tax returns for years 2012 and prior. With
few exceptions, we are no longer subject to state and local or non-U.S. income tax examinations by tax authorities for
years before 2003.
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