Income Taxes |
3 Months Ended |
|---|---|
Sep. 30, 2011 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax Disclosure Text Block |
Note 14 Income Taxes The Company has estimated the effective tax rate expected to be applicable for the full fiscal year. The federal and Australian effective rate used in providing for income taxes on a current year-to-date basis for the three months ended September 30, 2011 is 0% compared to 8% for the three months ended September 30, 2010. For the current fiscal year, we anticipate that we will be providing a full valuation allowance against our Australian and U.K. deferred tax assets. Tax assets are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. A valuation allowance reduces deferred tax assets to estimated realizable value, which assumes that it is more likely than not that we will be able to generate sufficient future taxable income in certain tax jurisdictions to realize the net carrying value. We review our deferred tax assets and valuation allowance on a quarterly basis. As part of our review, we consider positive and negative evidence, including cumulative results in recent years. As a result of our review for the quarter ended September 30, 2011, we provided for a full valuation allowance against our Australian deferred tax assets, in addition to a valuation allowance against our U.K deferred tax assets. We have reversed the valuation allowance on our U.S. deferred tax assets as we anticipate that we will utilize U.S. net operating loss and foreign tax credit carry forwards to offset federal tax on U.S. taxable income. However, such losses and credits are not available to offset state taxable income, thus resulting in the reported tax provision of $196,600. We anticipate we will continue to record a valuation allowance against the losses of these jurisdictions until such time as we are able to determine it is “more-likely-than-not” the deferred tax asset will be realized. Such position is dependent on whether there will be sufficient future taxable income to realize such deferred tax assets. |