GOVERNMENT ASSISTANCE PROGRAMS AND INCENTIVES

9 Months Ended

Sep. 30, 2024

Government Assistance [Abstract]

GOVERNMENT ASSISTANCE PROGRAMS AND INCENTIVES

GOVERNMENT ASSISTANCE PROGRAMS AND INCENTIVES

The Company benefits from various government incentives in countries where it operates in the form of cash grants or refundable tax credits. The eligibility to receive such assistance and amounts to be granted are determined based on regulations issued by the relevant government authorities. The incentives are generally based on qualifying expenditures or subject to achieving certain employment and investment targets. As there is no authoritative guidance under U.S. GAAP for government assistance to for-profit business entities, the Company accounts for government assistance by analogy to International Accounting Standards 20 ("IAS 20"), Accounting for Government Grants and Disclosure of Government Assistance. In accordance with IAS 20, the Company recognizes the benefits from government assistance when it has reasonable assurance it will comply with the terms of the assistance and the assistance will be received.

Tax Incentive for Research and Development (“R&D”) in Poland

During the third quarter of 2024, the Company determined it was eligible for R&D tax relief in Poland which allows the Company to reduce its tax base through bonus deductions for specific costs, such as salaries and social security contributions for employees working on R&D projects. The Company is able to utilize the tax relief by first offsetting its corporate income tax liability and then, to the extent the tax relief exceeds its corporate income tax liability, reducing future remittances of personal income tax withholding for qualified employees.

During the quarter ended September 30, 2024, the Company determined it was probable it would receive government incentives of $22.9 million related to 2023 R&D activities and $29.1 million related to R&D activities completed during the first nine months of 2024 which were recorded as a reduction to Cost of revenues in the condensed consolidated statements of income during the three and nine months ended September 30, 2024. As of September 30, 2024, $20.9 million of benefits were included in Prepaid and other current assets and $31.0 million of benefits were included in Other noncurrent assets on the condensed consolidated balance sheet related to the Poland R&D incentive.