XML 36 R18.htm IDEA: XBRL DOCUMENT v2.4.0.8
Income Taxes
3 Months Ended
Sep. 30, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

(12) Income Taxes

 

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are more likely than not to be realized. As of September 30, 2014, the Company has established a full valuation allowance against all of its net deferred tax assets to the extent they will not be utilized to offset the gain and income from discontinued operations.

 
To the extent that a loss or credit carryover can be utilized to offset the gain and income from discontinued operations, it has been recognized as a tax benefit to be applied against the current tax otherwise resulting from discontinued operations. 

 

To the extent that a taxable loss from the current year can be utilized to offset the tax otherwise resulting from discontinued operations, it has been recognized as a tax benefit from continuing operations.

 

The disposition of the ASO business resulted in the recognition of a taxable gain of approximately $27.0 million. The Company will utilize losses generated during its current fiscal year ending June 30, 2015, as well as loss carryovers and credits that are unrestricted by IRC Section 382 (which limits the utilization of loss carryovers). As of September 30, 2014, the Company expects that it will be able to offset all but $2.8 million of the gain. Any additional losses incurred during the current fiscal year ending June 30, 2015, will reduce the taxable gain and the taxes associated with that gain. The Company is currently unable to reasonably estimate the impact of any additional losses that may occur during the remainder of its fiscal year ending June 30, 2015. As of September 30, 2014, it is expected that the net federal and state tax impact of the disposition gain (net of the losses incurred during the three months ended September 30, 2014, and the tax attribute carryovers from prior years) is $1.1 million.

 

FASB ASC 740, Income Taxes (FASB ASC 740) addresses the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return. The Company has an unrecognized tax benefit of $0.1 million for the three months ended September 30, 2014 and 2013.

 

For the three months ended September 30, 2014 and 2013, the Company’s effective tax rate differed from the federal statutory rate of 35%, primarily due to recording changes to the valuation allowance placed against its net deferred tax assets.

 

Loss carryovers are generally subject to modification by tax authorities until 3 years after they have been utilized; as such, the Company is subject to examination for the fiscal years ended 2000 through present for federal purposes and fiscal years ended 2006 through present for state purposes.