Company: IBACR
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023510
Chunk: 16

Company: IB Acquisition Corp.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred
tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities
and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of
June 30, 2025 and September 30, 2024, the Company’s deferred tax asset had a full valuation allowance recorded against it. Our
effective tax rate was 24.34% and 22.04% for the three months ended June 30, 2025 and 2024, respectively, and 24.20% and 27.47% for the
nine months ended June 30, 2025 and 2024, respectively. The effective tax rate differs from the statutory tax rate of 21% for the period
ended June 30, 2025 and 2024, due to the valuation allowance on the deferred tax assets.

ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s unaudited financial statements
and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be
sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties,
accounting in interim period, disclosure and transition.

The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of June 30, 2025 and September 30, 2024. The Company is currently not
aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The
Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation
by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus
of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect
that the total amount of unrecognized tax benefits will materially change over