The ABCs of systemic healthcare reform - Cerner Corporation

(11) Income Taxes
Income tax expense (benefit) for the years ended 2008, 2007 and 2006 consists of the following:
Temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities that give rise to
significant portions of deferred income taxes at the end of 2008 and 2007 relate to the following:
During 2007, the Company determined that due to a change in circumstances, it is more likely than not that certain tax
operating loss carry-forwards in a non-U.S. jurisdiction would not be realized resulting in the recognition of a valuation allowance
totaling approximately $7,982,000. During 2008, this non-U.S. jurisdiction audited the Company. As a result of the audit,
certain tax positions previously taken were disallowed by the foreign jurisdiction, which reduced the deferred tax asset relating
to the net operating loss carryforward in that jurisdiction. The valuation allowance related to the net operating loss carryforward
was released because management believes it is more likely than not the Company will realize the remaining operating loss
carry-forward amount. Based upon the level of historical taxable income and projections for future taxable income over the
periods which the remaining deferred tax assets are expected to be deductible, as well as the scheduled reversal of deferred tax
liabilities, management believes it is more likely than not the Company will realize the remaining deferred tax assets and no
valuation allowance is required. At January 3, 2009, the Company had net operating loss carry-forwards subject to Section 382
of the Internal Revenue Code for Federal income tax purposes of $14.9 million which are available to offset future Federal
taxable income, if any, through 2020.
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