Fri, Aug 1, 2014, 12:16 PM EDT - U.S. Markets close in 3 hrs 44 mins

Recent

% | $
Click the to save as a favorite.

Black Diamond, Inc. Message Board

  • seeuoutside seeuoutside May 18, 2010 5:44 PM Flag

    question

    Can someone explain this statement, taken from the company's website letter to shareholders to me in layman's terms? Would there be any adverse or beneficial affects to a new investor to Clarus Corportation due to this deferred tax mentioned below? What does it mean that "will release the related portion of its valuation allowance"?

    "In connection with the closing of the transactions, the Company expects that it will more likely than not be able to realize a significant portion of its approximately $88.9 million deferred tax asset and therefore will release the related portion of its valuation allowance. As of March 31, 2010, Clarus’ net operating loss carryforwards were approximately $231 million."

    What I really want to know is whether or not I should invest now or wait until the transaction is finished with BDE. Thanks, I appreciate your time!

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Yea it is a weird statement. When there is a 50% chance or greater (ie more likely than not) that a company will use their NOLs they have to create a deferred tax asset. Think of it like a prepayment asset on the balance sheets. So what they are saying is that they are creating that deferred tax asset for approx 88M. I would say its more of a positive indicator than negative. I'm not sure if there is a defined methodology in determining the 50% or greater criteria (ie what kind of growth assumptions they are allowed to use etc.) Would be interesting though because might be able to back into EBITDA if there were defined criteria.

 
BDE
8.829+0.049(+0.56%)12:16 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.