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INCOME TAXES
9 Months Ended
Mar. 30, 2014
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE K - INCOME TAXES

 

The current income tax provision for the three and nine months ended March 30, 2014 is $1,342 thousand and $2,418 thousand, respectively. In addition, for the three and nine months ended March 30, 2014, local foreign taxes paid were $153 thousand and $382 thousand, respectively. The income tax provision for the three months ended and nine months ended March 31, 2013 was $188 thousand. For the three months ended March 31, 2013, there were $119 thousand in local foreign taxes paid.

 

Goodwill recorded as part of an asset purchase agreement is deductible for tax purposes and only recorded as a book charge if it is impaired. A deferred tax liability is recorded as the tax deduction is realized, which will not be reversed unless and until the goodwill is disposed of or impaired.

 

The Company will continue to record an income tax expense related to the amortization of goodwill as a discrete item each quarter unless and until such impairment occurs.

 

As of March 30, 2014 and June 30, 2013, our net deferred tax assets of $4.3 million and $4.4 million, respectively, were fully offset by a valuation allowance. ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not.

 

Based upon the weight of available evidence, which includes historical operating performance and uncertainties in forecasting our future results, we provided a full valuation allowance against our net U.S. deferred tax assets and a full valuation allowance against certain foreign deferred tax assets. The Company will reassess the need for a valuation allowance on a quarterly basis. A subsequent determination that the valuation allowance should be reduced would generally result in a benefit to the income tax provision.