D.11 Interim Disclosures
Sample Disclosure
Our ETR from continuing operations was XX percent and XX percent
for the quarter and nine months ended September 30, 20X2,
respectively, and XX percent and XX percent for the quarter and
nine months ended September 30, 20X1, respectively. The
following items caused the quarterly or YTD ETR to be
significantly different from our historical annual ETR:
- During the third quarter and nine months ended September 30, 20X2, we recorded an income tax benefit of approximately $XX million as a result of a favorable settlement of uncertain tax positions in Jurisdiction X, which reduced the ETR by XX percent and XX percent, respectively.
- During the nine months ended September 30, 20X1, we recorded an income tax benefit of approximately $XX million related to an increase in tax rates in Country X enacted in the third quarter, which increased the ETR by XX percent.
Sample Disclosure
We have historically calculated the provision for income taxes
during interim reporting periods by applying an estimate of the AETR
for the full fiscal year to “ordinary” income or loss (pretax income
or loss excluding unusual or infrequently occurring discrete items)
for the reporting period. We have used a discrete ETR method to
calculate taxes for the fiscal three- and six-month periods ended
June 30, 20X2. We determined that since small changes in estimated
“ordinary” income would result in significant changes in the
estimated AETR, the historical method would not provide a reliable
estimate for the fiscal three- and six-month periods ended June 30,
20X2.
For more information on variations in customary income tax expense relationships, see ASC
740-270-50-1.