Adjustments for Deferred Tax Asset Valuation Allowance Consider the following income tax footnote information for Oracle for the fiscal year ended May 31, 2019 (fiscal year 2019). The following is a geographical breakdown of income before the provision for income taxes: Year Ended May 31 (in millions) 2019 2018 2017 Domestic $4,529 $4,039 $4,409 Foreign 10,193 10,870 9,607 Income before provision for income taxes $14,722 $14,909 $14,016 The provision for income taxes consisted of the following: 2019 2018 2017 Year Ended May 31 ($ in millions) Current provision: Federal State $1,175 $9,984 $1,123 360 317 308 1,316 1,320 1,770 $2,851 $11,621 $3,201 Foreign Total current provision Deferred benefit: Federal State Foreign Total deferred benefit Total provision for income taxes $580 $(992) $(190 (34) (31) (35) (1,975) 7 (304) $(1,429) $(1,016) $(529) $1,422 $10,605 $2,672 The provision for income taxes differed from the amount computed by applying the federal statutory rate to our income before provision for income taxes as follows: Year Ended May 31 ($ in millions) 2019 2018 2017 U.S federal statutory tax rate 21.0% 29.2% 35.0% Tax provision at statutory rate $3,091 $4,355 $4,906 Impact of the Tax Act of 2017: One-time transition tax (635) 9,337 Deferred tax effects 168 (1,093) Foreign earnings at other than United States rates (947) (1,194) (1,574) State tax expense, net of federal benefit 236 170 180 Settlements and releases from judicial decisions and statute expirations, net (158) (302) (227) Domestic production activity deduction (104) (143) Federal research and development credit (190) (209) (152) Stock-based compensation (241) (362) (179) Other, net 97 7 (137) Total provision for income taxes $1,421 $10,605 $2,674 The components of our deferred tax assets and liabilities were as follows: May 31 (in millions) 2019 2018 Deferred tax assets: Accruals and allowances $649 $680 Employee compensation and benefits 775 797 Differences in timing of revenue recognition 386 406 Basis of property, plant and equipment and intangible assets 1,486 Tax credit and net operating loss carryforwards 4,460 3,137 Total deferred tax assets 7,756 5,020 Valuation allowance (1,519) (1,570) Total deferred tax assets, net 6,237 3,450 Deferred tax liabilities: Unrealized gain on stock (94) (94) Acquired intangible assets (1,168) (1,505) GILTI deferred (1,818) Basis of property, plant and equipment an intangible assets (190) Other (240) (58) Total deferred tax liabilities (3,320) (1,847) Net deferred tax assets $2,917 $1,603 $ millions 2016 2017 Total deferred tax asset $7,436 $5,923 Valuation allowance 1,397 1,408 Required a. Use the four-year average valuation allowance to deferred tax assets (2016-2019) of 22.55% to adjust the income statement for each of the four years 2016-2019. Follow Analyst Adjustments 10.3 for guidance in the adjustment process. Note: Use a negative sign to indicate an income statement reversal. Note: Do not round until your final answer; round your final answers below to the nearest whole dollar. 2016 2017 2018 2019 Income Statement Adjustments ($ millions) Income tax expense Net income ta $ 0 $ 0 $ 0 $ 0 0 O 0 b. Adjust the balance sheet for each of the four years 2016-2019. Note: Use a negative sign to indicate a decrease of the balance sheet accounts. Note: Round your answers to the nearest whole dollar. 2016 2017 2018 2019 0 $ 0 $ 0 $ 0 Balance Sheet Adjustments ($ millions) Valuation allowance Deferred tax assets, net Total assets Retained Earnings 0 0 0 0 0 0 0 0 O O O 0 Adjustments for Deferred Tax Asset Valuation Allowance Consider the following income tax footnote information for Oracle for the fiscal year ended May 31, 2019 (fiscal year 2019). The following is a geographical breakdown of income before the provision for income taxes: Year Ended May 31 (in millions) 2019 2018 2017 Domestic $4,529 $4,039 $4,409 Foreign 10,193 10,870 9,607 Income before provision for income taxes $14,722 $14,909 $14,016 The provision for income taxes consisted of the following: 2019 2018 2017 Year Ended May 31 ($ in millions) Current provision: Federal State $1,175 $9,984 $1,123 360 317 308 1,316 1,320 1,770 $2,851 $11,621 $3,201 Foreign Total current provision Deferred benefit: Federal State Foreign Total deferred benefit Total provision for income taxes $580 $(992) $(190 (34) (31) (35) (1,975) 7 (304) $(1,429) $(1,016) $(529) $1,422 $10,605 $2,672 The provision for income taxes differed from the amount computed by applying the federal statutory rate to our income before provision for income taxes as follows: Year Ended May 31 ($ in millions) 2019 2018 2017 U.S federal statutory tax rate 21.0% 29.2% 35.0% Tax provision at statutory rate $3,091 $4,355 $4,906 Impact of the Tax Act of 2017: One-time transition tax (635) 9,337 Deferred tax effects 168 (1,093) Foreign earnings at other than United States rates (947) (1,194) (1,574) State tax expense, net of federal benefit 236 170 180 Settlements and releases from judicial decisions and statute expirations, net (158) (302) (227) Domestic production activity deduction (104) (143) Federal research and development credit (190) (209) (152) Stock-based compensation (241) (362) (179) Other, net 97 7 (137) Total provision for income taxes $1,421 $10,605 $2,674 The components of our deferred tax assets and liabilities were as follows: May 31 (in millions) 2019 2018 Deferred tax assets: Accruals and allowances $649 $680 Employee compensation and benefits 775 797 Differences in timing of revenue recognition 386 406 Basis of property, plant and equipment and intangible assets 1,486 Tax credit and net operating loss carryforwards 4,460 3,137 Total deferred tax assets 7,756 5,020 Valuation allowance (1,519) (1,570) Total deferred tax assets, net 6,237 3,450 Deferred tax liabilities: Unrealized gain on stock (94) (94) Acquired intangible assets (1,168) (1,505) GILTI deferred (1,818) Basis of property, plant and equipment an intangible assets (190) Other (240) (58) Total deferred tax liabilities (3,320) (1,847) Net deferred tax assets $2,917 $1,603 $ millions 2016 2017 Total deferred tax asset $7,436 $5,923 Valuation allowance 1,397 1,408 Required a. Use the four-year average valuation allowance to deferred tax assets (2016-2019) of 22.55% to adjust the income statement for each of the four years 2016-2019. Follow Analyst Adjustments 10.3 for guidance in the adjustment process. Note: Use a negative sign to indicate an income statement reversal. Note: Do not round until your final answer; round your final answers below to the nearest whole dollar. 2016 2017 2018 2019 Income Statement Adjustments ($ millions) Income tax expense Net income ta $ 0 $ 0 $ 0 $ 0 0 O 0 b. Adjust the balance sheet for each of the four years 2016-2019. Note: Use a negative sign to indicate a decrease of the balance sheet accounts. Note: Round your answers to the nearest whole dollar. 2016 2017 2018 2019 0 $ 0 $ 0 $ 0 Balance Sheet Adjustments ($ millions) Valuation allowance Deferred tax assets, net Total assets Retained Earnings 0 0 0 0 0 0 0 0 O O O 0