Question

Analyzing and Interpreting Tax Footnote Under Armour, Inc. reports total tax expense on its income statement for year ended December 31, 2010 of $40,442 and cash paid for taxes of $38,773. The tax footnote in the company's 10-K filing, reports the following deferred tax information. Deferred tax assets and liabilities consisted of the following in thousands): December 31 ($ thousands) 2010 2009 Deferred tax assets State tax credits, net of federal tax impact $ 1,750 $ -- Tax basis inventory adjustment 3,052 1,874 Inventory obsolescence reserves 2,264 2,800 Allowance for doubtful accounts and other reserves 8,996 7,042 Foreign net operating loss carryforward 10,917 9,476 Stock-based compensation 8,790 5,450 Intangible asset 372 1,068 Deferred rent 2,975 1,728 Deferred compensation 1,449 1,105 Other 2,709 3,151 Total deferred tax assets 43,274 33,694 Less: valuation allowance (1,765) Total net deferred tax assets 41,509 33,694 Deferred tax liabilities Prepaid expenses (1,865) (1,133) Property, plant and equipment (3,104) (5,783) Total deferred tax liabilities (4,969) (6,916) Total deferred tax assets, net $36,540 $ 26,778

What proportion of the foreign net operating losses does the company believe will likely expire unused? (Round your answer to the nearest whole number

Answer 1

Proportion of the foreign net operating loss carry forward balance does the company believe will likely expire unused:

Proportion = Increase in Valuation Allowance / Net Operating Loss Carry forward Balance for 2010*100

Proportion = 1765 / 10917 = 16%