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Income Taxes
3 Months Ended
Mar. 31, 2018
Income Taxes Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
INCOME TAXES
Cadence’s provision for income taxes of $5.3 million for the three months ended March 31, 2018 primarily resulted from the federal income tax effects of the U.S. Tax Cuts and Jobs Act (the “Tax Act)” and state and foreign income taxes on anticipated fiscal 2018 income, partially offset by $8.7 million of tax benefit related to stock-based compensation that vested or was exercised during the period.
The Tax Act was enacted in December 2017 and included several new tax provisions related to the taxation of foreign earnings and a reduction in the federal corporation income tax rate from 35% to 21% as of January 1, 2018.
Cadence reduced its provisional estimate for the fiscal 2017 deemed repatriation transition tax by $2.6 million during the three months ended March 31, 2018 based on its continuing analysis of the earnings and cash balances of foreign subsidiaries and the additional guidance issued by the applicable tax authorities. Cadence has not yet completed the accounting for the fiscal 2017 effects of the Tax Act because of the complexity and ambiguity of certain of its tax and accounting effects. Cadence expects to refine and complete the accounting for the Tax Act during the remainder of fiscal 2018 as it obtains, prepares and analyzes additional information in accordance with Staff Accounting Bulletin No. 118. For further discussion regarding the income tax effects of the Tax Act, see Note 6 in the notes to consolidated financial statements in Cadence’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017.
Cadence adopted ASU 2016-16, “Income taxes (Topic 740): Intra-entity Transfers of Assets Other Than Inventory” during the three months ended March 31, 2018, which required all income tax effects of intra-entity transfers of assets other than inventory to be recognized in the condensed consolidated income statement when the transfer occurs. For intra-entity transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. For further discussion regarding new accounting standards, see Note 1 in the notes to condensed consolidated financial statements under the heading “Recently Adopted Accounting Standards.”