Reformulation for Deferred Tax Asset Valuation Allowance Under Armour Inc. reports total tax expense of $154,112 thousand on its income statement for year ended December 31, 2015, and paid cash of $99,708 thousand for taxes. The tax footnote in the company's 10-K filing, reports the following deferred tax assets and liabilities information. December 31 ($thouands) 2015 2014 Deferred tax assets Stock-based compensation $ 40,406 $ 35,161 Allowance for doubtful accounts and other reserves 33,821 24,774 Accrued expenses 19,999 11,398 Foreign net operating loss carryforward 19,600 16,302 Deferred rent 13,991 11,005 Inventory obsolescence reserves 11,956 8,198 Tax basis inventory adjustment 10,019 5,845 U.S. net operating loss carryforward 9,217 4,733 Foreign tax credits 6,151 5,131 State tax credits, net of foreign impact 4,966 4,245 Deferred compensation 2,080 1,858 Other 6,346 4,592 Total deferred tax assets 178,552 133,242 Less: valuation allowance (24,043) (15,550) Total net deferred tax assets 154,509 117,692 Deferred tax liability Property, plant and equipment (31,069) (17,638) Intangible asset (22,820) (7,010) Prepaid expenses (8,766) (6,424) Other (627) (612) Total deferred tax liabilities (63,282) (31,684) Total deferred tax assets, net $ 91,227 $ 86,008 Use the above information along with the information below to answer the requirements. $ thousands 2012 2013 Deferred tax asset $ 64,453 $ 106,377 Valuation allowance 3,966 8,091 a. Use the four-year average valuation allowance to deferred tax assets (2012 through 2015) to reformulate the income statement for each of the four years 2012-2015. See Analyst Adjustments 10.3 for guidance in the reformulation process. Compute four year average of valuation allowance/deferred tax assets Round to one decimal place (ex: 0.2345 = 23.5%) 0 * % a. Use the four-year average valuation allowance to deferred tax assets (2012 through 2015) to reformulate the income statement for each of the four years 2012-2015. See Analyst Adjustments 10.3 for guidance in the reformulation process. Compute four year average of valuation allowance/deferred tax assets Round to one decimal place (ex: 0.2345 = 23.5%) 0 X % Use rounded percentage for subsequent computations. Round answers to the nearest whole number. Use negative signs with answers to indicate adjustments that reduce account balances. 2012 2013 2014 2015 Income Statement Adjustments Income tax expense Net income $ $ 0 x $ ox 0 x $ ox 0 x $ ox 0x ox b. Reformulate the balance sheet for each of the four years 2012-2015. Use rounded answers computed in part a. to complete the table below. Use negative signs with answers to indicate adjustments that reduce account balances. 2015 2013 Ox $ 2014 ox$ or Balance Sheet Adjustments Valuation allowance Deferred tax assets Total assets 2012 0x $ X Retained earnings X Reformulation for Deferred Tax Asset Valuation Allowance Under Armour Inc. reports total tax expense of $154,112 thousand on its income statement for year ended December 31, 2015, and paid cash of $99,708 thousand for taxes. The tax footnote in the company's 10-K filing, reports the following deferred tax assets and liabilities information. December 31 ($thouands) 2015 2014 Deferred tax assets Stock-based compensation $ 40,406 $ 35,161 Allowance for doubtful accounts and other reserves 33,821 24,774 Accrued expenses 19,999 11,398 Foreign net operating loss carryforward 19,600 16,302 Deferred rent 13,991 11,005 Inventory obsolescence reserves 11,956 8,198 Tax basis inventory adjustment 10,019 5,845 U.S. net operating loss carryforward 9,217 4,733 Foreign tax credits 6,151 5,131 State tax credits, net of foreign impact 4,966 4,245 Deferred compensation 2,080 1,858 Other 6,346 4,592 Total deferred tax assets 178,552 133,242 Less: valuation allowance (24,043) (15,550) Total net deferred tax assets 154,509 117,692 Deferred tax liability Property, plant and equipment (31,069) (17,638) Intangible asset (22,820) (7,010) Prepaid expenses (8,766) (6,424) Other (627) (612) Total deferred tax liabilities (63,282) (31,684) Total deferred tax assets, net $ 91,227 $ 86,008 Use the above information along with the information below to answer the requirements. $ thousands 2012 2013 Deferred tax asset $ 64,453 $ 106,377 Valuation allowance 3,966 8,091 a. Use the four-year average valuation allowance to deferred tax assets (2012 through 2015) to reformulate the income statement for each of the four years 2012-2015. See Analyst Adjustments 10.3 for guidance in the reformulation process. Compute four year average of valuation allowance/deferred tax assets Round to one decimal place (ex: 0.2345 = 23.5%) 0 * % a. Use the four-year average valuation allowance to deferred tax assets (2012 through 2015) to reformulate the income statement for each of the four years 2012-2015. See Analyst Adjustments 10.3 for guidance in the reformulation process. Compute four year average of valuation allowance/deferred tax assets Round to one decimal place (ex: 0.2345 = 23.5%) 0 X % Use rounded percentage for subsequent computations. Round answers to the nearest whole number. Use negative signs with answers to indicate adjustments that reduce account balances. 2012 2013 2014 2015 Income Statement Adjustments Income tax expense Net income $ $ 0 x $ ox 0 x $ ox 0 x $ ox 0x ox b. Reformulate the balance sheet for each of the four years 2012-2015. Use rounded answers computed in part a. to complete the table below. Use negative signs with answers to indicate adjustments that reduce account balances. 2015 2013 Ox $ 2014 ox$ or Balance Sheet Adjustments Valuation allowance Deferred tax assets Total assets 2012 0x $ X Retained earnings X