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Hewlett-Packard

Hewlett-Packard. April 1, 1013 Heidi Bennett and Mitchell Dimmerling. Provision for Income Taxes. Provision for Income Taxes. (Benefit from) taxes on earnings was as follows for the following fiscal year ended October 31:. Reconciliation of the statutory rate to the provision rate.

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Hewlett-Packard

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  1. Hewlett-Packard April 1, 1013 Heidi Bennett and Mitchell Dimmerling

  2. Provision for Income Taxes

  3. Provision for Income Taxes • (Benefit from) taxes on earnings was as follows for the following fiscal year ended October 31:

  4. Reconciliation of the statutory rate to the provision rate $11,933 x 6.0% $715.98

  5. Lower rates in other jurisdictions, net – Other jurisdictions have more favorable tax rates than the U.S. so HP plans to reinvest some of its earnings on these jurisdictions. Therefore, U.S. taxes are not applied to these reinvested earnings. • Valuation allowance – because of HP’s large financial loss in the current year, the allowance was increased to help offset the tax rate. • Nondeductible goodwill – Impairment test stated goodwill and purchased intangible assets $18,035m • This is a permanent difference. • Created a loss before income tax expense for HP.

  6. Deferred Tax Assets

  7. Deferred Tax Liabilities

  8. Significant components of DTA and DTL were as follows:

  9. Employee and retiree benefits – tax codes require corporations to pay taxes on amounts as they are paid into the funds. Not as they are disbursed. • Deferred Revenue – somewhat like subscription revenue, but for HP it is more than likely revenue from contracts. • Taxes must be paid upon receipt of money, not over a period of time.

  10. Are there any Questions?

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