D.9 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.