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OHL USA, INC. AND SUBSIDIARIES <br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br />DECEMBER 31, 2020 <br />Note 21 - Provision For Income Taxes (cont'd.) <br />The net deferred tax asset includes the fol'owing components: <br />Deferred tax asset $ 66,419,541 <br />Deferred tax liabilities (11,835,992) <br />Valuation allowance - <br />Net deferred tax asset $ 54,583,549 <br />The Company has net operating loss carryforwards of approximately $299,052,000 for <br />federal, state and local purposes, which is available to offset future taxable income, if any, and <br />expires in years ranging from 2031 through 2038. FASB ASC Subtopic 740-10 requires a <br />,.more likely than not" criterion be applied when evaluating the realizability of a deferred tax <br />asset. Management expects to generate sufficient taxable income in the future to utilize the <br />deferred tax assets. <br />The Company files income tax returns in the U.S. in federal and various state and local <br />jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or <br />local tax examinations by taxing authorities for years before 2017. The years 2017 to 2019 <br />remain subject to examination by taxing authorities. <br />The provision for income taxes differs from the provision that would result from applying <br />statutory rates due to the permanent book to tax differences relating to amortization expense. <br />Note 22 - Change in Estimate <br />During the year ended December 31, 2020, the Company had a decrease in estimated profit <br />on contracts, which resulted in a current period decrease in net income of approximately <br />$8,159,000, net of income taxes of approximately $3,840,000. The decrease would have been <br />reported in the preceding period had the decrease in estimated profit been known at that time. <br />Revisions in estimated profits are made m the period in which circumstances requiring the <br />revision become known. <br />36 <br />