Income Tax Accounting Policy
Johnson & Johnson intends to continue to reinvest its undistributed international earnings to expand its international operations; therefore, no U.S. tax expense has been recorded with respect to the undistributed portion not intended for repatriation. At January 2, 2011 and January 3, 2010, the cumulative amount of undistributed international earnings was approximately $37.0 billion and $32.2 billion, respectively.
Deferred income taxes are recognized for tax consequences of temporary differences by applying enacted statutory tax rates, applicable to future years, to differences between the financial reporting and the tax basis of existing assets and liabilities.
Source: Johnson & Johnson, Annual Report
Income Tax Expense (Benefit)
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Johnson & Johnson, income tax expense (benefit), continuing operations
Source: Based on data from Johnson & Johnson 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. |
Johnson & Johnson's currently payable declined from 2008 to 2009 and from 2009 to 2010.
|
| 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. |
Johnson & Johnson's deferred declined from 2008 to 2009 but then increased from 2009 to 2010 exceeding 2008 level.
|
| Provision for taxes on income |
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. |
Johnson & Johnson's provision for taxes on income declined from 2008 to 2009 but then slightly increased from 2009 to 2010.
|
Effective Income Tax Rate (EITR)
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Johnson & Johnson, effective income tax rate (EITR) reconciliation
Source: Based on data from Johnson & Johnson Annual Reports
| Item |
Description |
The company |
| Effective 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. |
Johnson & Johnson's effective tax rate declined from 2008 to 2009 and from 2009 to 2010.
|
Deferred Tax Assets (Liabilities), Net
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Johnson & Johnson, deferred tax assets (liabilities), net
Source: Based on data from Johnson & Johnson Annual Reports
| Item |
Description |
The company |
| 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. |
Johnson & Johnson's deferred tax assets declined from 2008 to 2009 and from 2009 to 2010.
|
| Deferred income taxes |
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. |
Johnson & Johnson's deferred income taxes declined from 2008 to 2009 and from 2009 to 2010.
|
