Company: BWMN
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001628280-25-023232
Chunk: 82

Company: Bowman Consulting Group Ltd.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 82
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ances– 2,030 Change in fair value of contingent consideration(146)(1,559)Settlement of contingent consideration(3,023)(4,386)Balance at end of period$3,483 $6,652 The change in fair value consideration is included in Other Expense in the Condensed Consolidated Income Statement.Income TaxesThe Company recognizes deferred income tax assets or liabilities for expected future tax consequences of events recognized in the condensed consolidated financial statements or tax returns. Under this method, deferred income tax assets or liabilities are determined based upon the difference between the financial statement and income tax bases of assets and liabilities using enacted tax rates expected to apply when the differences settle or become realized. Valuation allowances are provided when it is more likely than not that a deferred tax asset is not realizable or recoverable in the future. As of March 31, 2025, no valuation allowances are required, and all deferred tax assets are realizable.The Company assesses uncertain tax positions to determine whether income tax positions will more likely than not be sustained upon examination by the Internal Revenue Service or other taxing authorities. If the Company cannot reach a more-likely-than-not determination, no benefit is recorded. If the Company determines that the tax position is more likely than not to be sustained, the Company records the largest amount of benefit that is more likely than not to be realized when the tax position is settled. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. Beginning January 1, 2022, the Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the option to deduct research and development expenditures in the current year and now requires taxpayers to capitalize and amortize research and development costs pursuant to Internal Revenue Code Section 174. The capitalized expenses are amortized over a 5-year period for domestic expenses and a 15-year period for foreign expenses. As a result of this provision of the TCJA, we have established a $61.3 million uncertain tax position related to capitalized and amortizable research and development ("R&D") costs as of the three-month period ended March 31, 2025. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in income in the period that includes the enactment date. The Company’s effective tax rate for the three months ended March 31, 2025 and 2024 was (78.9)% and 68.9%, respectively. The change in the Company’s