Income Tax Accounting Policy
Schlumberger computes taxes on income in accordance with the tax rules and regulations of the many taxing authorities where the income is earned. The income tax rates imposed by these taxing authorities vary substantially. Taxable income may differ from pretax income for financial accounting purposes. To the extent that differences are due to revenue or expense items reported in one period for tax purposes and in another period for financial accounting purposes, an appropriate provision for deferred income taxes is made. Any effect of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. When it is more likely than not that a portion or all of the deferred tax asset will not be realized in the future, Schlumberger provides a corresponding valuation allowance against deferred tax assets.
Schlumberger's tax filings are subject to regular audit by the tax authorities in most of the jurisdictions in which it conducts business. These audits may result in assessments for additional taxes which are resolved with the authorities or, potentially, through the courts. Schlumberger recognizes the impact of a tax position in its financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Tax liabilities are recorded based on estimates of additional taxes which will be due upon the conclusion of these audits. Estimates of these tax liabilities are made based upon prior experience and are updated in light of changes in facts and circumstances. However, due to the uncertain and complex application of tax regulations, it is possible that the ultimate resolution of audits may result in liabilities which could be materially different from these estimates. In such an event, Schlumberger will record additional tax expense or tax benefit in the year in which such resolution occurs.
Schlumberger generally does not provide income taxes relating to undistributed earnings, as the earnings either would not be taxable when remitted or are considered to be indefinitely reinvested.
Source: Schlumberger Ltd., Annual Report
Income Tax Expense (Benefit)
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Schlumberger Ltd., income tax expense (benefit), continuing operations
Source: Based on data from Schlumberger Ltd. 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. |
Schlumberger Ltd.'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. |
Schlumberger Ltd.'s deferred declined from 2009 to 2010 but then slightly increased from 2010 to 2011.
|
| Consolidated 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. |
Schlumberger Ltd.'s consolidated taxes on income increased from 2009 to 2010 and from 2010 to 2011.
|
Effective Income Tax Rate (EITR)
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Schlumberger Ltd., effective income tax rate (EITR) reconciliation
Source: Based on data from Schlumberger Ltd. 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. |
Schlumberger Ltd.'s effective income tax rate declined from 2009 to 2010 but then increased from 2010 to 2011 exceeding 2009 level.
|
Deferred Tax Assets (Liabilities), Net
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Schlumberger Ltd., deferred tax assets (liabilities), net
Source: Based on data from Schlumberger Ltd. Annual Reports
| Item |
Description |
The company |
| Net deferred 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. |
Schlumberger Ltd.'s net deferred tax assets (liabilities) declined from 2009 to 2010 but then slightly increased from 2010 to 2011.
|
