Income Tax Accounting Policy
The provision for income taxes is based on pretax income reported in the consolidated statements of earnings and currently enacted tax rates for each jurisdiction. Certain income and expense items are recognized in different time periods for financial reporting and income tax filing purposes, and deferred income taxes are provided for the effect of temporary differences. Emerson Electric also provides for U.S. federal income taxes, net of available foreign tax credits, on earnings intended to be repatriated from non-U.S. locations. No provision has been made for U.S. income taxes on approximately $5.9 billion of undistributed earnings of non-U.S. subsidiaries as of September 30, 2011, as these earnings are considered permanently invested or otherwise indefinitely retained for continuing international operations. Recognition of U.S. taxes on undistributed earnings would be triggered by a management decision to repatriate those earnings, although there is no current intention to do so. Determination of the amount of taxes that might be paid on these undistributed earnings if eventually remitted is not practicable.
Source: Emerson Electric Co., Annual Report
Income Tax Expense (Benefit)
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Emerson Electric Co., income tax expense (benefit), continuing operations
Source: Based on data from Emerson Electric Co. Annual Reports
| Item |
Description |
The company |
| Current |
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. |
Emerson Electric Co.'s current increased from 2009 to 2010 and 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. |
Emerson Electric Co.'s deferred declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
| Income tax expense |
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. |
Emerson Electric Co.'s income tax expense increased from 2009 to 2010 and from 2010 to 2011.
|
Effective Income Tax Rate (EITR)
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Emerson Electric Co., effective income tax rate (EITR) reconciliation
Source: Based on data from Emerson Electric Co. Annual Reports
| Item |
Description |
The company |
| Effective income 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. |
Emerson Electric Co.'s effective income tax rate increased from 2009 to 2010 and from 2010 to 2011.
|
Deferred Tax Assets (Liabilities), Net
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Emerson Electric Co., deferred tax assets (liabilities), net
Source: Based on data from Emerson Electric 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. |
Emerson Electric Co.'s gross deferred tax assets increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
|
| Net 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. |
Emerson Electric Co.'s net deferred tax assets increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
|
| Net deferred income tax asset (liability) |
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. |
Emerson Electric Co.'s net deferred income tax asset (liability) declined from 2009 to 2010 and from 2010 to 2011.
|
