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SEC Filings

10-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-K on 02/21/2017
Entire Document
 
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)

The components of deferred tax assets and liabilities are listed below.
 
December 31,
 
2016
 
2015
Postretirement/post-employment benefits
$
23.1

 
$
25.3

Deferred compensation
192.4

 
193.4

Pension costs
36.6

 
25.8

Basis differences in fixed assets
(80.2
)
 
(67.5
)
Rent
41.7

 
41.1

Interest
58.9

 
60.9

Accruals and reserves
17.2

 
29.4

Allowance for doubtful accounts
13.3

 
10.8

Basis differences in intangible assets
(405.0
)
 
(408.2
)
Investments in equity securities
(6.3
)
 
(8.3
)
Tax loss/tax credit carry forwards
354.6

 
354.5

Prepaid expenses
(2.9
)
 
(2.3
)
Deferred revenue
(32.0
)
 
0.0

Other
44.3

 
60.3

Total deferred tax assets, net
255.7

 
315.2

Valuation allowance
(255.6
)
 
(275.1
)
Net deferred tax assets
$
0.1

 
$
40.1

We evaluate the realizability of our deferred tax assets on a quarterly basis. The realization of our deferred tax assets is primarily dependent on future earnings. The amount of the deferred tax assets considered realizable could be reduced or increased in the near future if estimates of future taxable income are lower or greater than anticipated. A valuation allowance is established when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. In circumstances where there is negative evidence, establishment of a valuation allowance is considered. The factors used in assessing valuation allowances include all available evidence, such as past operating results, estimates of future taxable income and the feasibility of tax planning strategies. We believe that cumulative losses in the most recent three-year period represent significant negative evidence, and as a result, we determined that certain of our deferred tax assets required the establishment of a valuation allowance. The deferred tax assets for which an allowance was recognized relate primarily to state and foreign tax loss carryforwards.
The change in the valuation allowance is listed below.
 
Years ended December 31,
 
2016
 
2015
 
2014
Balance at beginning of period
$
275.1

 
$
332.2

 
$
467.3

Reversed to costs and expenses
(15.4
)
 
(20.8
)
 
(72.8
)
Charged (reversed) to gross tax assets and other accounts 1
9.5

 
(9.2
)
 
(26.4
)
Foreign currency translation
(13.6
)
 
(27.1
)
 
(35.9
)
Balance at end of period
$
255.6

 
$
275.1

 
$
332.2

 
1
Primarily represents changes to the valuation allowance related to the change of a corresponding deferred tax asset.
In both 2016 and 2015, amounts reversed to costs and expenses primarily related to decreases in valuation allowances in Continental Europe for existing deferred tax assets.
In 2014, the net decrease was primarily related to a reversal of a valuation allowance for a deferred tax asset of $124.8, where we believe it is now "more likely than not" that the corresponding tax losses will be utilized over an extended period of time, based on implementing an internal financing tax action plan. This was partially offset by the establishment of a valuation allowance of $57.2, where we believe it is no longer "more likely than not" that the corresponding tax losses will be utilized, based on forecasted income not exceeding historical cumulative losses.
As of December 31, 2016, there were $1,012.3 of loss carryforwards. These loss carryforwards were all non-U.S. tax loss carryforwards, of which $889.1 have unlimited carryforward periods and $123.2 have expiration periods from 2017 to 2036. As

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