|12 Months Ended|
Dec. 31, 2019
|Income Tax Disclosure [Abstract]|
NOTE 15. INCOME TAXES
We recognize deferred tax assets and liabilities for future tax consequences attributable to differences between our consolidated financial statement carrying amount of assets and liabilities and their respective tax bases. We measure these deferred tax assets and liabilities using enacted tax rates expected to apply in the years in which these temporary differences are expected to reverse. We recognize the effect on deferred tax assets and liabilities resulting from a change in tax rates in income in the period that includes the date of the change.
For financial reporting purposes, we recorded a valuation allowance of $4.1 million as of December 31, 2019 to offset $28.6 million of the deferred tax assets related to the federal net operating loss carryforwards and $8.9 million of the deferred tax assets related to the state net operating loss carryforwards of $16.7 million. For financial reporting purposes, we recorded a valuation allowance of $13.0 million as of December 31, 2019 to offset the deferred tax assets related to the federal and state net operating loss carryforwards.
The consolidated provision for income taxes is as follows:
Consolidated deferred tax assets and liabilities consist of the following:
The following table reconciles the above net deferred tax liabilities to the financial statements:
A reconciliation of the statutory federal income tax rate to the provision for income tax is as follows:
At December 31, 2019, we had net operating loss carryforwards for federal income tax purposes of approximately $136.1 million that expire in
years2021 through 2038 and for state income tax purposes of approximately $793.7 million that expire in years 2020 through 2039. For financial reporting purposes at December 31, 2019, we had a valuation allowance of $8.9 million, net of federal benefit, to offset the deferred tax assets related to the state net operating loss carryforwards along with a valuation allowance of $4.1 million to offset the deferred tax assets related to the federal net operating loss carryforwards.
As a result of our adjusted cumulative three-year
pre-taxbook loss as of December 31, 2019, we performed an assessment of positive and negative evidence with respect to the realization of our net deferred tax assets. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, the availability of carryforwards and estimates of projected future taxable income. Based on this assessment, we concluded that additional deferred tax assets of $7.6 million are
notlikely to be realized. As such, an additional valuation allowance of $7.6 million which is comprised of an additional $4.1 million for federal tax purposes and $3.5 million for state tax purposes bringing the total valuation allowance from $5.4 million to $13.0 million, was recorded during the annual period ended December 31, 2019.
The Company has adopted ASC 842 using the modified retrospective basis and has reflected the ROU asset with corresponding lease liability in the balance sheet footnote of the deferred tax balances above. The entry resulted in primarily a full balance sheet reclass between the ROU asset, lease liability and deferred rent accounts. The result of the change resulted in an immaterial impact to the operations of the consolidated financial statements.
The amortization of our indefinite-lived intangible assets for tax purposes, but not for book purposes, creates deferred tax liabilities. A reversal of deferred tax liabilities may occur when indefinite-lived intangibles: (1) become impaired; or (2) are sold, which would typically only occur in connection with the sale of the assets of a station or groups of stations or the entire company in a taxable transaction. Due to the amortization for tax purposes and not book purposes of our indefinite-lived intangible assets, we expect to continue to generate deferred tax liabilities in future periods exclusive of any impairment losses in future periods. These deferred tax liabilities and net operating loss carryforwards result in differences between our provision for income tax and cash paid for taxes.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef