Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2011 | |
| Income taxes [Abstract] | |
| INCOME TAXES |
NOTE 6 — INCOME TAXES Under GAAP, a valuation allowance must be recorded if it is “more likely than not” that such deferred tax assets will not be realized. Appropriate consideration is given to all available evidence (both positive and negative) related to the realization of the deferred tax assets on a quarterly basis. In conducting our regular quarterly evaluation, we decided to maintain a full deferred tax asset valuation allowance as of September 30, 2011 based primarily upon the existence of a three-year cumulative loss position. Although our current financial forecasts indicate that sufficient taxable income will be generated in the future to ultimately realize the existing deferred tax benefits, those forecasts were not considered to constitute sufficient positive evidence to overcome the observable negative evidence associated with the three-year cumulative loss position determined as of September 30, 2011. At September 30, 2011, the valuation allowance decreased to $ 81.9 million compared to $82.7 million at June 30, 2011 and $92.7 million at December 31, 2010. This decrease was mainly due to a decrease of deferred tax assets balance related to credit loss provision. We had zero balance of net deferred tax assets as of September 30, 2011 and December 31, 2010. During the first nine months of 2010, we recorded an additional valuation allowance of $47.7 million against our deferred tax assets, resulting in $93.0 million of valuation allowance at September 30, 2010. There was $807,000 of net deferred tax liabilities as of September 30, 2010. There was a reversal of tax expense of $18,000 during the third quarter of 2011 due to the interest recalculation related to 740-10 (FIN 48) reserves. The tax expense of $706,000 recognized for the nine months ended September 30, 2011 was primarily due to an out-of-period adjustment of $718,000 to reserve for certain ASC 740-10 (FIN 48) exposure items. During the fourth quarter of 2009, the Company recorded a tax benefit upon electing a 5-year net operating loss carryback according to the IRS Code section IRC § 172(b)(1)(H) amended in November 2009. This out -of-period adjustment was to reinstate the reserves that the Company released as the statute of limitations had expired in previous years. Due to the Company filing amended tax returns as a result of the tax law revision, the Company needed to reestablish these reserves. |