Income Tax Accounting Policy
The provision for income taxes is determined using the asset and liability approach. Tax laws require items to be included in tax filings at different times than the items are reflected in the financial statements. A current liability is recognized for the estimated taxes payable for the current year. Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Deferred taxes are adjusted for enacted changes in tax rates and tax laws. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.
Source: Caterpillar Inc., Annual Report
Income Tax Expense (Benefit)
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Caterpillar Inc., income tax expense (benefit), continuing operations
Source: Based on data from Caterpillar Inc. Annual Reports
| Item |
Description |
The company |
| Current tax provision (benefit) |
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. |
Caterpillar Inc.'s current tax provision (benefit) increased from 2009 to 2010 and from 2010 to 2011.
|
| Deferred tax provision (benefit) |
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. |
Caterpillar Inc.'s deferred tax provision (benefit) increased from 2009 to 2010 but then slightly declined from 2010 to 2011 not reaching 2009 level.
|
| Provision (benefit) 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. |
Caterpillar Inc.'s provision (benefit) for income taxes increased from 2009 to 2010 and from 2010 to 2011.
|
Effective Income Tax Rate (EITR)
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Caterpillar Inc., effective income tax rate (EITR) reconciliation
Source: Based on data from Caterpillar Inc. Annual Reports
| Item |
Description |
The company |
| Effective 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. |
Caterpillar Inc.'s effective rate increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
|
Deferred Tax Assets (Liabilities), Net
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Caterpillar Inc., deferred tax assets (liabilities), net
Source: Based on data from Caterpillar Inc. Annual Reports
| Item |
Description |
The company |
| Deferred income tax assets, gross |
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. |
Caterpillar Inc.'s deferred income tax assets, gross increased from 2009 to 2010 and from 2010 to 2011.
|
| Deferred income 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. |
Caterpillar Inc.'s deferred income tax assets increased from 2009 to 2010 and from 2010 to 2011.
|
| Deferred income taxes, net |
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. |
Caterpillar Inc.'s deferred income taxes, net declined from 2009 to 2010 and from 2010 to 2011.
|
