Company: CRUS
Filing Date: 2025-05-23
Form Type: 10-K
Source: 0000772406-25-000014
Chunk: 115

Company: CIRRUS LOGIC, INC.
Filing Date: 2025-05-23
Form: 10-K
Item: Item 8
Chunk 115
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 and 2019 federal income tax returns are under examination by the U.S. Internal Revenue Service ("IRS").  The IRS has proposed adjustments that would increase U.S. taxable income related to transfer pricing matters with respect to our U.S. and U.K. affiliated companies.  The final Revenue Agent’s Report asserted additional tax of approximately $168.3 million, excluding interest, and imposed penalties of approximately $63.7 million.  We do not 

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agree with the IRS's positions and have not accrued an additional liability. We intend to vigorously dispute the proposed adjustments.  We are pursuing resolution through the administrative process with the IRS Independent Office of Appeals and, if necessary, through judicial remedies.  We expect it could take a number of years to reach resolution on these matters.  Although the final resolution of these matters is uncertain, the Company believes adequate amounts have been reserved for any adjustments to the provision for income taxes that may ultimately result. However, if the IRS prevails in these matters, the assessed tax, interest, and penalties, if any, could have an adverse impact on our financial position, results of operations, and cash flows in future periods.  The Company is not under an income tax audit in any other major taxing jurisdiction.

18.    Segment Information 

We determine our operating segments in accordance with Financial Accounting Standards Board (“FASB”) guidelines. Our Chief Executive Officer (“CEO”) has been identified as the CODM under these guidelines.The Company operates and tracks its results in one reportable segment, but reports revenue performance in two product lines: Audio and HPMS.  Our CEO receives and uses enterprise-wide financial information to assess financial performance and allocate resources.  Our product lines have similar characteristics and customers and share operations support functions such as sales, public relations, supply chain management, various research and development and engineering support, in addition to the general and administrative functions of human resources, legal, finance and information technology.  Therefore, there is no complete, discrete financial information maintained for these product lines.  Revenue by product line is disclosed in Note 9 - Revenues.  The CODM allocates resources and evaluates Company performance based on net income.  This information is used to measure profitability, make budgeting and forecasting decisions, monitor performance trends, and to compare actual results to forecasts.  The CODM regularly reviews the consolidated statement of income and a disaggregation of operating expenses, with a focus on personnel-related and product development costs.  The measure of segment assets is reported on the balance sheet