For financial reporting purposes earnings (losses) before income taxes include the following components:

	For the years ended August 31,
($ in thousands)	2019			2018			2017
Current:
Federal	$	2,190		$	9,313		$	7,873
State		324			1,047			781
Foreign		3,107			3,266			4,785
Total current		5,621			13,626			13,439
Deferred:
Federal		(3,209	)		517			(688	)
State		(624	)		(47	)		(43	)
Foreign		(1,853	)		(520	)		(172	)
Total deferred		(5,686	)		(50	)		(903	)
Total income tax provision	$	(65	)	$	13,576		$	12,536

Total income tax provision resulted in effective tax rates differing from that of the statutory United States federal income tax rates. The reasons for these differences are:

	For the years ended August 31,
	2019						2018						2017
($ in thousands)	Amount			%			Amount			%			Amount			%
U.S. statutory rate	$	443			21.0		$	8,700			25.7		$	12,500			35.0
State and local taxes, net of federal tax benefit		(379	)		(18.0	)		743			2.2			480			1.3
Foreign tax rate differences		164			7.8			809			2.4			(486	)		(1.4	)
U.S. tax reform		160			7.6			2,496			7.4			—			—
Deferred tax asset valuation allowance		142			6.7			758			2.2			(21	)		(0.1	)
Domestic production activities deduction		—			—			(727	)		(2.1	)		(700	)		(2.0	)
Federal credits		(338	)		(16.0	)		(375	)		(1.1	)		(288	)		(0.8	)
Uncertain tax benefits		(153	)		(7.3	)		198			0.6			264			0.7
Other		(104	)		(4.9	)		974			2.9			787			2.2
Effective rate	$	(65	)		(3.1	)	$	13,576			40.1		$	12,536			35.1

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

	August 31,
($ in thousands)	2019			2018
Deferred tax assets:
Allowance for doubtful accounts	$	687		$	947
Accrued expenses		7,791			8,142
Warranty		2,118			1,648
Defined benefit pension plan		1,705			1,528
Inventory		1,445			1,935
Share-based compensation		1,146			925
Vacation		741			797
Net operating loss and capital loss carry forwards		3,648			2,868
Deferred revenue		2,716			536
Other		2,074			665
Gross deferred tax assets		24,071			19,991
Valuation allowance		(3,759	)		(3,562	)
Net deferred tax assets	$	20,312		$	16,429

Deferred tax liabilities:
Intangible assets	$	(6,163	)	$	(6,648	)
Property, plant, and equipment		(3,263	)		(4,219	)
Total deferred tax liabilities	$	(9,426	)	$	(10,867	)

Net deferred tax assets	$	10,886		$	5,562

In assessing the ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Because the Company has a recent history of generating cumulative losses in a certain foreign tax jurisdiction, management did not consider projections of future taxable income as persuasive evidence for the recoverability of deferred tax assets in that jurisdiction. The Company has recorded a valuation allowance of $2.4 million as of August 31, 2019 and 2018 related to the net operating loss in the certain foreign tax jurisdiction. The Company has also recorded a valuation allowance of $1.4 million and $1.2 million as of August 31, 2019 and 2018, respectively, related to capital losses from business divestitures where the Company believes it is more likely than not that the benefit from the capital loss will not be realized.

The Company does not intend to, and has not historically, repatriated earnings of its foreign subsidiaries. Thus, the Company has not provided a deferred income tax liability on these undistributed earnings that are indefinitely reinvested. The Company would recognize a deferred income tax liability if the Company were to determine that such earnings were no longer indefinitely reinvested. During fiscal year 2018, U.S. Tax Reform was enacted, requiring companies to pay a one-time deemed repatriation tax on certain unrepatriated earnings of foreign subsidiaries, and generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries. There are other taxes that may be incurred if the Company would repatriate earnings of its foreign subsidiaries. It is not practicable to estimate the amount of income taxes that would be incurred if the Company would repatriate earnings of its foreign subsidiaries.

The Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.

	August 31,
($ in thousands)	2019			2018
Unrecognized tax benefits at September 1	$	1,399		$	1,498
Increases for positions taken in current year		1,457			117
Increases for positions taken in prior years		78			43
Decreases for positions taken in prior years		(216	)		(21	)
Reduction resulting from lapse of applicable statute of limitations		(329	)		(38	)
Decreases for settlements with tax authorities		—			(200	)
Unrecognized tax benefits at August 31	$	2,389		$	1,399

The net amount of unrecognized tax benefits at both August 31, 2019 and 2018 that, if recognized, would impact the Company’s effective tax rate was $0.6 million and $1.1 million respectively. Recognition of these tax benefits would have a favorable impact on the Company’s effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. Total accrued liabilities for interest and penalties included in the unrecognized tax benefits liability were $1.1 million and $1.0 million for the years ended August 31, 2019 and 2018, respectively.

While it is expected that the amount of unrecognized tax benefits will change in the next twelve months as a result of the expiration of statutes of limitations, the Company does not expect this change to have a significant impact on its results of operations or financial position.

The Company files income tax returns in the United States and in the United States and various state and foreign jurisdictions. The Company is no longer subject to income tax examination by US federal and most state tax authorities for tax years prior to fiscal 2017. Other major jurisdictions where we conduct business generally have statutes of limitations ranging from three to five years.