Income taxes are accounted for under the asset and liability method in accordance with Accounting Standards Codification . Deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. DTAs and DTLs are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on DTAs and DTLs of a change in tax rates is recognized in income in the period that includes the enactment date.

 

Current accounting standards require a valuation allowance against DTAs if, based on the weight of available evidence, it is more likely than that some or all of the DTAs be realized. Due to the uncertainty surrounding the realization of these DTAs in future tax returns, all of the DTAs have been fully offset by a valuation allowance at and except the alternative minimum tax (“AMT”) credit carryforward amount described below.

 

In assessing the realizability of DTAs, management considers whether it is more likely than that some portion or all of the DTAs will be realized. The ultimate realization of DTAs is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the DTAs are deductible, management believes it is more likely than that the Company will realize the benefits of these deductible differences or tax carryforwards as of except for the AMT credit carryforward.

 

The Tax Cuts and Jobs Act was signed into law on The Tax Act reduced the U.S. federal corporate tax rate from to effective The Tax Act repeals the AMT for corporations, and permits any existing AMT credit carryforwards to be used to reduce the regular tax obligation in and Companies continue using AMT credits to offset any regular income tax liability in years through with of remaining AMT credits refunded in each of the and tax years, and all remaining credits refunded in tax year This results in full realization of an existing AMT credit carryforward irrespective of future taxable income. Accordingly, of the million AMT credit carryforwards are included in prepaid and other current assets, and the remaining AMT credit carryforwards are included in noncurrent assets in the consolidated balance sheets as of and

 

Current accounting standards include guidance on the accounting for uncertainty in income taxes recognized in the financial statements. Such standards also prescribe a recognition threshold and measurement model for the financial statement recognition of a tax position taken, or expected to be taken, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company believes that the ultimate deductibility of all tax positions is highly certain, although there is uncertainty about the timing of such deductibility. As a result, liability for uncertain tax positions was recorded as of or and we do expect any significant changes in the next months. Should we need to accrue interest or penalties on uncertain tax positions, we would recognize the interest as interest expense and the penalties as a selling, general and administrative expense. As of tax years - remained subject to examination by federal and state tax authorities.

 

As of we had approximately million of federal and million of state net operating loss carryforwards, as well as approximately million of federal Research and Development (“R&D”) credit carryforwards.