Company: ACTG
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000934549-25-000042
Chunk: 147

Company: ACACIA RESEARCH CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 147
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 not be realized, or if it is determined that there is uncertainty regarding future realization of such assets. When the Company establishes or reduces the valuation allowance against its deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period such determination is made.Under U.S. GAAP, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position will be sustained upon examination. Tax positions that meet the more likely than not threshold are measured using a probability weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement.The provision for income taxes for interim periods is determined using an estimate of Acacia’s annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, Acacia updates the estimate of the annual effective tax rate, and if the estimated tax rate changes, a cumulative adjustment is recorded.Recent Accounting PronouncementsRecently AdoptedThere have been no recent accounting pronouncements adopted by the Company which would have a material impact on the Company’s financial statements.

19

Not Yet AdoptedIn December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities on an annual basis (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 also requires that entities disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The adoption of the standard will not have an impact on the Company’s consolidated statements of operations and balance sheets, as the standard is expected to result in enhanced disclosures only. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense