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Provision for Income Taxes?
A company I invest in recently had a large Provision for Income Tax (benefit) of $14 million.
What exactly does that mean? Is it just a deduction or will the company get that back in cash?
Thank you for your answer!
1 Answer
- MoneyMenLv 76 years ago
I means they lost money (~$40MM) in the period of time you are looking at. They book a negative income tax provision (i.e. a benefit) because they now have Net Operating Losses that can be used to offset future profits when calculating future taxes. So no, it's not going to be a cash windfall, but if they earn a profit of $40MM before taxes next year, they won't have to pay anything at that time.
