Walt Disney Co. (DIS) | Analysis of Income Taxes

Income Tax Accounting Policy

Walt Disney accounts for current and deferred income taxes. Deferred income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. Where, based on the weight of all available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management's judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

A tax position must meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

Source: Walt Disney Co., Annual Report

Income Tax Expense (Benefit)

Walt Disney Co., income tax expense (benefit), continuing operations

Source: Based on data from Walt Disney 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.	Walt Disney 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.	Walt Disney Co.'s deferred declined from 2009 to 2010 but then slightly increased from 2010 to 2011.
Income tax expense (benefit)	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.	Walt Disney Co.'s income tax expense (benefit) increased from 2009 to 2010 and from 2010 to 2011.

Effective Income Tax Rate (EITR)

Walt Disney Co., effective income tax rate (EITR) reconciliation

Source: Based on data from Walt Disney 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.	Walt Disney Co.'s effective income tax rate declined from 2009 to 2010 and from 2010 to 2011.

Deferred Tax Assets (Liabilities), Net

Walt Disney Co., deferred tax assets (liabilities), net

Source: Based on data from Walt Disney Co. Annual Reports

Item	Description	The company
Deferred tax assets before valuation allowance	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.	Walt Disney Co.'s deferred tax assets before valuation allowance increased from 2009 to 2010 and from 2010 to 2011.
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.	Walt Disney Co.'s deferred tax assets increased from 2009 to 2010 and from 2010 to 2011.
Net deferred 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.	Walt Disney Co.'s net deferred tax asset (liability) declined from 2009 to 2010 but then slightly increased from 2010 to 2011.