Company: AIRTP
Filing Date: 2025-06-27
Form Type: 10-K
Source: 0000353184-25-000044
Chunk: 122

Company: AIR T INC
Filing Date: 2025-06-27
Form: 10-K
Item: Item 1A
Chunk 122
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 Other deferred tax assets792 517 Total deferred tax assets20,028 16,314 Property and equipment(1,651)(1,735)Right-of-use assets(3,236)(2,703)Capital gain deferment(1,793)(1,763)Foreign intangible assets(1,830)(2,089)Investment in partnerships(2,159)(105)Other deferred tax liabilities(403)(393)Total deferred tax liabilities(11,072)(8,788)Net deferred tax assets8,956 7,526 Less valuation allowance(11,103)(9,973)Net deferred tax liabilities$(2,147)$(2,447)The Company is not asserting indefinite reinvestment with regards to foreign earnings in the Netherlands. The Company has not recorded deferred taxes associated with these undistributed earnings as the impact of any future distribution will not have a material tax impact. The Company continues to assert that it will permanently reinvest all other foreign earnings, including basis differences of all the Company's foreign subsidiaries. As a result of its permanent reinvestment assertion, the Company has not recorded deferred taxes related to its foreign subsidiaries under the indefinite exception. The Company has not determined the deferred tax liability associated with these undistributed earnings and basis differences, as such determination is not practicable.Valuation AllowanceManagement assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended March 31, 2025. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of March 31, 2025, a valuation allowance of $11.1 million (inclusive of the Delphax entities’ valuation allowances that were discussed above) has been recorded to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth. The Organization for Economic Co-operation and Development ("OECD") has introduced a framework to implement a global minimum tax. Several jurisdictions in which the Company operates have enacted laws effective January 1