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Income Taxes
3 Months Ended
Mar. 31, 2012
Income Taxes [Abstract]  
Income Taxes

4. Income Taxes

For each of the three month periods ended March 31, 2012 and 2011, the Company did not recognize any income tax expense. Exercises of stock options during the three months ended March 31, 2012 and 2011 resulted in tax deductions for stock-based compensation in excess of expense recorded for the stock options under GAAP. For interim periods within years for which taxable net income is forecasted, the Company recognizes the income tax benefit related to the excess tax deductions as an increase to capital in excess of par value, which based on ASC 740 results in an offsetting charge in the same amount to income tax expense. As of March 31, 2012, the Company had $7,534,000 of cumulative tax deductions from exercises of stock options in periods of net loss in excess of expense recorded for the stock options under GAAP. The benefit of these excess tax deductions had not begun to be realized as of March 31, 2012 because the Company has incurred cumulative net operating losses since inception. Accordingly, the tax benefit will not be recognized as an increase to capital in excess of par value until the excess deductions reduce income taxes payable.

Because the Company has incurred cumulative net operating losses since inception, all tax years remain open to examination by U.S. federal, North Carolina and Massachusetts tax authorities.