Income Tax Accounting Policy
The provision for income taxes is determined using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. 3M records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. As of December 31, 2011 and 2010, 3M recorded $82 million and $128 million, respectively, of valuation allowances. 3M follows accounting guidance related to accounting for uncertainty in income taxes to record uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions.
Source: 3M Co., Annual Report
Income Tax Expense (Benefit)
3M Co., income tax expense (benefit), continuing operations
Source: Based on data from 3M Co. Annual Reports
| Item |
Description |
The company |
| Currently payable |
The component of income tax expense for the period representing amounts of income taxes paid or payable (or refundable) for the period for all income tax obligations as determined by applying the provisions of relevant enacted tax laws to relevant amounts of taxable income (loss) from continuing operations. |
3M Co.'s currently payable increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
|
| Deferred |
The component of income tax expense for the period representing the net change in the entity's deferred tax assets and liabilities pertaining to continuing operations. |
3M Co.'s deferred declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
| Provision for income taxes |
The sum of the current income tax expense (benefit) and the deferred income tax expense (benefit) pertaining to pretax income (loss) from continuing operations; income tax expense (benefit) may include interest and penalties on tax uncertainties based on the entity's accounting policy. |
3M Co.'s provision for income taxes increased from 2009 to 2010 and from 2010 to 2011.
|
Effective Income Tax Rate (EITR)
3M Co., effective income tax rate (EITR) reconciliation
Source: Based on data from 3M Co. Annual Reports
| Item |
Description |
The company |
| Effective worldwide tax rate |
A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations. |
3M Co.'s effective worldwide tax rate declined from 2009 to 2010 but then slightly increased from 2010 to 2011.
|
Deferred Tax Assets (Liabilities), Net
3M Co., deferred tax assets (liabilities), net
Source: Based on data from 3M Co. Annual Reports
| Item |
Description |
The company |
| Gross deferred tax assets |
The sum of the tax effects as of the balance sheet date of the amounts of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws (before the valuation allowance, if any, to reduce such sum amount to net realizable value). Includes any tax benefit realized in deferred tax assets for significant impacts of tax planning strategies. |
3M Co.'s gross deferred tax assets increased from 2009 to 2010 and from 2010 to 2011.
|
| Deferred tax assets |
The aggregate tax effects as of the balance sheet date of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; net of deducting the allocated valuation allowance, if any, to reduce such amount to net realizable value. |
3M Co.'s deferred tax assets increased from 2009 to 2010 and from 2010 to 2011.
|
| Net deferred tax assets |
For entities that net deferred tax assets and tax liabilities, represents the unclassified net amount of deferred tax assets and liabilities as of the balance sheet date, which result from applying the applicable enacted tax rate to net temporary differences and carryforwards pertaining to assets or liabilities. A temporary difference is a difference between the tax basis of an asset or liability and its carrying amount in the financial statements prepared in accordance with generally accepted accounting principles that will reverse in ensuing periods. |
3M Co.'s net deferred tax assets declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
