Accounting for Uncertainty in Income Taxes

3 Months Ended

Apr. 30, 2016

Accounting for Uncertainty in Income Taxes

Accounting for Uncertainty in Income Taxes

Note 13.Accounting for Uncertainty in Income Taxes

In accordance with FASB ASC 740, Income Taxes, the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As of April 30, 2016 and 2015, the Company had $11.0 and $9.3, respectively, of net unrecognized tax benefits. This liability, if recognized, would affect the Company’s effective tax rate. Pursuant to the terms of the Tax Sharing Agreement with our former parent, B/E Aerospace, the Company may be liable for income tax in certain foreign jurisdictions arising from the examination of tax years during which the Company was part of the B/E Group.  The statute of limitations in these foreign jurisdictions is open for tax years 2007-2015. There are currently no material income tax audits in progress.

The Company classifies interest and penalties related to income tax as income tax expense. The amount included in the Company’s liability for unrecognized tax benefits for interest and penalties was $1.5 and $1.0 at April 30, 2016 and 2015, respectively.