Company: HCKT
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0000950170-25-030037
Chunk: 65

Company: HACKETT GROUP, INC.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1B
Chunk 65
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 December 27, 2024 and December 29, 2023 the Company had a valuation allowance of $1.3 million and of $1.5 million, respectively, to reduce deferred income tax assets, primarily related to foreign net operating loss carryforwards, to the amounts expected to be realized.The undistributed earnings in foreign subsidiaries as of December 27, 2024, was approximately $12.4 million. The Company has historically reinvested its foreign earnings abroad indefinitely and continues to reinvest future earnings abroad.   Penalties and tax-related interest expense are reported as a component of income tax expense. For the years ended December 27, 2024, December 29, 2023, and December 30, 2022 the total amount of accrued income tax-related interest and penalties was $50 thousand, $50 thousand and $192 thousand, respectively.  

51

THE HACKETT GROUP, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

9. Income Taxes (continued)The Company prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.The following table sets forth the detail and activity of the ASC 740 liability during the years ended December 27, 2024 and December 29, 2023 (in thousands):

        Year Ended

        December 27,

        December 29,

        2024

        2023

        Beginning balance
         
        $
        220

        $
        450

        Additions based on tax positions

        —

        4

           Reduction for prior year tax deductions

        —

        (234
        )

        Ending balance
         
        $
        220

        $
        220

                As of December 27, 2024 and December 29, 2023, the Company had a liability related to the ASC 740-10, “Accounting for Uncertainty in Income Taxes,” of $0.2 million in both periods which was classified as a current liability and included in accrued expenses and other liabilities in the accompanying consolidated balance sheets in both periods.The Company does not believe there will be any material changes in its unrecognized