PROVISION FOR INCOME TAXES
|12 Months Ended|
Sep. 30, 2011
|PROVISION FOR INCOME TAXES||
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. A full valuation allowance is established against all net deferred tax assets as of September 30, 2011 and 2010 based on estimates of recoverability. While the Company has optimistic plans for its business strategy, it determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its new business model.
Because of the impacts of the valuation allowance, there was no income tax expense or benefit for the year ended September 30, 2011. There was a current income tax benefit of $230,382 for the year ended September 30, 2010 reflecting an adjustment to income tax receivable for net operating loss carrybacks as a result of true-ups to our final 2009 tax return that was filed during fiscal 2010.
A reconciliation of the differences between the effective and statutory income tax rates for years ended September 30, is as follows:
At September 30, deferred income tax assets and liabilities were comprised of:
The Company annually conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of September 30, 2011.
As part of its deferred tax assets, the Company has net operating loss carryforwards resulting from its acquisition of LiveDeal, Inc. in fiscal 2007. Such amounts are subject to IRS code section 382 limitations and expire in 2027. The 2007 to 2010 tax years are still subject to audit.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/presentationRef