Question about an Income Statement?

Sometimes when a company has had past losses, they can apply the "carry back" or "carry forward" rules. It seems as though Netflix is carrying forward given your statement that "most" of their income is from recovered taxes. Basically, this means that since they had negative earnings in prior years, they are able to recover prior paid taxes relating to income that they generated previously. It's been awhile since I've dealth with this, but the rule used to be they could recover taxes paid from the prior 3 years or carry forward and offset taxes for the next 5 years. Make sense? If not, feel free to email me for further discussion.

Hey there. Companies, specially public ones, have to be extremely conservartive in their accounting. Imagine the IRS audited them and told them they owed $33 million dollars. The outside auditor would force the company to accrue for it (set the money apart) while they contest it with their tax lawers. Say they won the case and the liability no longer is valid. Next reporting period, they would have to "reverse" their accrual or "provision", hitting ther Profit&Loss with a credit (benefit), although money never came in or out of their account.

In accounting, I believe that if something is put within parenthesis, it means that it is a loss or money going out of the company.

Numbers in parentheses mean negative numbers

It indicates a deferred tax expense.