Steelcase: Analysis of deferred taxes, defined benefit plan

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All amounts are in millions, except per share data.

1. What amount of deferred tax assets or deferred tax liabilities are on the two most recent years on the balance sheet? What gives rise to these deferred taxes? What information is disclosed in the footnotes related to deferred taxes? Please define a deferred tax asset and deferred tax liability.

On the balance sheet, Steelcase reports net deferred tax assets of $132.5 in 2012 and $132.2 in 2011. The net deferred taxes are the result of timing (temporary) differences between GAAP income subject to tax and taxable income reportable on the tax returns. There are some deferred tax liabilities $173 in 2012 and $185.6 in 2011, as disclosed in Footnote 15, but these are netted against the deferred tax assets in reporting on the balance sheet.

As seen in Footnote 15 (cut and pasted in the attached word document), the footnote discloses the amount of the current tax provision (expense) that is current and the portion that is deferred, as well as the reason for the deferred portions.

Also in Footnote 15 (cut and pasted in the attached word document), you see that the firm explains all the items that change the effective tax rate from the statutory rate to the effective rate.

A deferred tax asset is something that will reduce the tax liability in later years. A deferred tax liability is something that will result in taxes owed but not in the current period.

http://www.investorwords.com/6478/deferred_tax_asset.html
http://www.investorwords.com/6785/deferred_tax_liability.html

2. What temporary and permanent differences does the company disclose in its footnotes? What are some other examples of temporary and permanent differences?

As seen in Footnote 15, Steelcase discloses temporary differences from net operating loss carryforwards, employee benefit plan obligations, reserves and accruals, valuation allowances, and depreciation and amortization of PPE and intangible assets (see cut and paste in word for visual). They seem to have most of the classics! Timing differences can also arise from collecting rent or revenue in advance (gift cards) or prepaying business expenses.

3. What is the amount of income tax provision in the two most recent years on the income statement? What information is disclosed in the footnotes relating to income tax expense? Does the company have a net operating loss carryforward or carryback? What ...