XML 42 R15.htm IDEA: XBRL DOCUMENT v2.4.0.8
Note 9 - Income Taxes
6 Months Ended
Jun. 30, 2014
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 9. Income Taxes


The Company’s quarterly income taxes reflect an estimate of the corresponding year’s annual effective tax rate and include, when applicable, adjustments from discrete tax items. For the three and six months ended June 30, 2014, the Company’s tax provision was $44,000 and $81,000, compared to $90,000 and $72,000 for the three and six months ended June 30, 2013. The Company’s income tax provision for the three and six month ended June 30, 2014 and 2013 primarily related to income taxes for the Company’s non-U.S. operations as the Company’s U.S. operations were in a loss position and it maintains a 100% valuation allowance for its U.S. deferred tax assets.


The Company utilizes the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. As of June 30, 2014 and December 31, 2013, the Company had a 100% valuation allowance against its U.S. deferred tax assets. Significant management judgment is required in determining any valuation allowance recorded against deferred tax assets. In evaluating the ability to recover deferred tax assets, the Company considered available positive and negative evidence giving greater weight to its recent cumulative losses and its ability to carry-back losses against prior taxable income and lesser weight to its projected financial results due to the challenges of forecasting future periods. The Company also considered, commensurate with its objective verifiability, the forecast of future taxable income including the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies.