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EXCEL - IDEA: XBRL DOCUMENT - Diligent Board Member Services, Inc.Financial_Report.xls
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EX-31.2 - EXHIBIT 31.2 - Diligent Board Member Services, Inc.v326276_ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - Diligent Board Member Services, Inc.v326276_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - Diligent Board Member Services, Inc.v326276_ex31-1.htm
EX-32.2 - EXHIBIT 32.2 - Diligent Board Member Services, Inc.v326276_ex32-2.htm
10-Q - FORM 10-Q - Diligent Board Member Services, Inc.v326276_10q.htm
XML - IDEA: XBRL DOCUMENT - Diligent Board Member Services, Inc.R29.htm
EX-10.17 - EXHIBIT 10.17 - Diligent Board Member Services, Inc.v326276_ex10-17.htm
v2.4.0.6
Income taxes
9 Months Ended
Sep. 30, 2012
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

 

9) Income taxes

 

Income tax expense is provided on an interim basis based upon management’s estimate of the annual effective tax rates in each tax jurisdiction. The income tax provision for the nine months ended September 30, 2012 includes U.S. income taxes at an effective rate of 22.4 % and foreign tax obligations of our U.K., New Zealand and Australian subsidiaries. The U.S. effective rate is lower than the statutory rate due to the expected utilization of approximately $6.2 million of net operating loss carryforwards in 2012, as discussed further below.

 

Section 382 of the U.S. Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that can be used to offset taxable income when a corporation has undergone significant changes in stock ownership. During the second quarter of 2012, the Company completed its Section 382 study and determined that, due to changes in stock ownership in prior years, some of its net operating loss carryforwards will be limited. This limitation results in only $6.2 million available to offset expected taxable income in 2012. Beginning in 2013, a further limitation of approximately $0.5 million per year will be available to offset expected taxable income until expiration. Based on this limitation, the Company expects that approximately $2.5 million of its total net operating loss carryforwards of $16.7 million will expire unutilized in 2029. A full valuation allowance had previously been provided on the related deferred tax asset, and in the second quarter of 2012 the deferred tax asset and valuation allowance relating to the net operating loss carryforwards expected to expire unutilized were written off.

 

Significant management judgment is required in determining any valuation allowance recorded against deferred tax assets. The benefit expected to be realized from the utilization of the net operating loss carryforwards in 2012 has been reflected in the current year through the reduction in the effective tax rate. The Company has recorded a partial valuation allowance against the remaining net operating loss carryforwards available to offset future income through 2029 to the extent that it believes it is more likely than not that they will not be realized.

 

The Company and its subsidiaries may be subject to, but are not currently under, audit by federal, state and foreign tax authorities. These audits may result in additional tax liabilities. The Company’s federal, state and foreign income tax returns for the 2009 through 2011 tax years are open for, but are not currently under, examination by the respective taxing jurisdictions.