Sures relating to income taxes tax footnote to its

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sures Relating to Income Taxes tax footnote to its income statement is shown in Exhibit 5.5. Pfizer's $1,124 million tax ::::::::eJ."ie reported in its income statement (called the provision) consists of the following two ~-=,,"~ents: urrent tax expense. Current tax expense determined from the company's tax rearms; it is the amount payable (in cash) tax authorities (some of these taxes ve been paid during the year as the com- "33lly makes installments). Pfizer labels o "Current income taxes" and reports separate amounts for taxes to federal, state, ocal, and international tax authorities. Deferred tax expense. Deferred tax expense o the effect on tax expense from changes in • ferred tax liabilities and deferred tax assets. Pfizer labels this "Deferred income taxes" and reports separate amounts for deferrals related to U.S. and international tax rules. $2,500 ~r==========]--------------------T25% $2,000 rn c g $1,500 'E w $1,000 $500 $O~------~------~-------r-------{ 2007 2008 2009 2010 financial statement footnotes, companies must disclose the components of deferred tax o ies and assets. Pfizer's deferred tax footnote to its balance sheet (shown in Exhibit 5.6) total deferred tax assets of $15,027 million and total deferred tax liabilities of $29,646 . On the balance sheet companies report deferred tax assets and liabilities as either current current based on when the benefit (payment) is expected to be received (made). Companies oennitted to net some deferred tax assets and liabilities, and also to combine deferred taxes other accounts on the balance sheet. Thus, for some companies, it is impossible to com- o - reconcile the tax footnote to the balance sheet. Many of Pfizer's deferred tax assets relate ed liabilities or asset write-downs arising from expenses included in financial reporting e, but not yet recognized for tax reporting (such as employee benefits and restructuring .& .... ;. •. ..&1.1:». Pfizer has recorded a valuation allowance of $894 million. These various items all yield reductions of the company's tax payments and are, therefore, classified as assets.
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5-23 Module 5 I Revenue Recognition and Operating Income - ---- - - - ! EXHIBIT 5.5 , Year Ended December 31 (Millions of dollars) Income Tax Expense Footnote for Pfizer 2010 2009 2008 $(2,774) $10,169 $ 707 (313) 71 154 2,033 (10,002) 106 (6) (93) (136) (1,060) 145 831 -- -- 2,258 1,539 2,115 (74) 513 (1,301) -- 2,184 2,052 814 -- -- -- $ 1,124 $ 2,197 $1,645 United States Current income taxes Federal . State and local . Deferred income taxes Federal .................................... .......... •. State and local . Total U.S. tax (benefit) provision . International Current income taxes ............................... ....... Deferred income taxes . Total international tax provision . Total provision for taxes on income ..... ............ ............ •. f E·XHISiT·5.6- Deferred Taxes Footnote for Pfizer Assets 2010 Deferred Tax (Liabilities) (Millions of dollars) Assets 2009 Deferred Tax (Liabilities) Prepaid/deferred items. . . . . . . .. . . Inventories '" ..• ............. Intangibles . Property, plant and equipment. .................. Employee benefits . Restructurings and other charges . . . . . . . . . . . . .. Legal and product liability reserves .
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