Income Tax Accounting Policy
Kraft Foods recognizes tax benefits in financial statements when uncertain tax positions are more likely than not to be sustained upon audit. The amount Kraft Foods recognizes is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.
Kraft Foods recognizes deferred tax assets for deductible temporary differences, operating loss carryforwards and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
Source: Kraft Foods Inc., Annual Report
Income Tax Expense (Benefit)
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Kraft Foods Inc., income tax expense (benefit), continuing operations
Source: Based on data from Kraft Foods Inc. 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. |
Kraft Foods Inc.'s current increased from 2008 to 2009 but then declined significantly 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. |
Kraft Foods Inc.'s deferred increased from 2008 to 2009 and from 2009 to 2010.
|
| 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. |
Kraft Foods Inc.'s provision for income taxes increased from 2008 to 2009 but then slightly declined from 2009 to 2010.
|
Effective Income Tax Rate (EITR)
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Kraft Foods Inc., effective income tax rate (EITR) reconciliation
Source: Based on data from Kraft Foods Inc. 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. |
Kraft Foods Inc.'s effective tax rate increased from 2008 to 2009 and from 2009 to 2010.
|
Deferred Tax Assets (Liabilities), Net
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Kraft Foods Inc., deferred tax assets (liabilities), net
Source: Based on data from Kraft Foods Inc. Annual Reports
| Item |
Description |
The company |
| Deferred income 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. |
Kraft Foods Inc.'s deferred income tax assets declined from 2008 to 2009 and from 2009 to 2010.
|
| Net 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. |
Kraft Foods Inc.'s net deferred income tax assets declined from 2008 to 2009 and from 2009 to 2010.
|
| Net deferred income tax assets (liabilities) |
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. |
Kraft Foods Inc.'s net deferred income tax assets (liabilities) declined from 2008 to 2009 and from 2009 to 2010.
|
