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INCOME TAXES (Tables) | 12 Months Ended
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Jun. 30, 2024
Income Tax Disclosure [Abstract] |
Provision for Income Taxes | The components of the provision for income taxes were as follows:
(In millions) |
Year Ended June 30, |  | 2024 |  |  | 2023 |  |  | 2022 |
Current Taxes |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 12,165 |  |  | $ | 14,009 |  |  | $ | 8,329 |
U.S. state and local |  |  | 2,366 |  |  |  | 2,322 |  |  |  | 1,679 |
Foreign |  |  | 9,858 |  |  |  | 6,678 |  |  |  | 6,672 |
Current taxes |  | $ | 24,389 |  |  | $ | 23,009 |  |  | $ | 16,680 |
Deferred Taxes |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | (4,791 | ) |  | $ | (6,146 | ) |  | $ | (4,815 | )
U.S. state and local |  |  | (379 | ) |  |  | (477 | ) |  |  | (1,062 | )
Foreign |  |  | 432 |  |  |  | 564 |  |  |  | 175 |
Deferred taxes |  | $ | (4,738 | ) |  | $ | (6,059 | ) |  | $ | (5,702 | )
Provision for income taxes |  | $ | 19,651 |  |  | $ | 16,950 |  |  | $ | 10,978 |
Income Before Income Taxes | U.S. and foreign components of income before income taxes were as follows:
(In millions) |
Year Ended June 30, |  | 2024 |  |  | 2023 |  |  | 2022 |
U.S. |  | $ | 62,886 |  |  | $ | 52,917 |  |  | $ | 47,837 |
Foreign |  |  | 44,901 |  |  |  | 36,394 |  |  |  | 35,879 |
Income before income taxes |  | $ | 107,787 |  |  | $ | 89,311 |  |  | $ | 83,716 |
Difference Between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes | The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate were as follows:
Year Ended June 30, |  | 2024 |  |  | 2023 |  |  | 2022 |
Federal statutory rate |  |  | 21.0% |  |  |  | 21.0% |  |  |  | 21.0% |
Effect of: |  |  |  |  |  |  |  |  |  |  |  |
Foreign earnings taxed at lower rates |  |  | (1.4)% |  |  |  | (1.8)% |  |  |  | (1.3)% |
Impact of intangible property transfers |  |  | 0% |  |  |  | 0% |  |  |  | (3.9)% |
Foreign-derived intangible income deduction |  |  | (1.1)% |  |  |  | (1.3)% |  |  |  | (1.1)% |
State income taxes, net of federal benefit |  |  | 1.5% |  |  |  | 1.6% |  |  |  | 1.4% |
Research and development credit |  |  | (1.1)% |  |  |  | (1.1)% |  |  |  | (0.9)% |
Excess tax benefits relating to stock-based compensation |  |  | (1.1)% |  |  |  | (0.7)% |  |  |  | (1.9)% |
Interest, net |  |  | 1.1% |  |  |  | 0.8% |  |  |  | 0.5% |
Other reconciling items, net |  |  | (0.7)% |  |  |  | 0.5% |  |  |  | (0.7)% |
Effective rate |  |  | 18.2% |  |  |  | 19.0% |  |  |  | 13.1% |
Deferred Income Tax Assets and Liabilities | The components of the deferred income tax assets and liabilities were as follows:
(In millions) |  |  |  |  |  |
June 30, |  | 2024 |  |  | 2023 |
Deferred Income Tax Assets |  |  |  |  |  |  |  |
Stock-based compensation expense |  | $ | 765 |  |  | $ | 681 |
Accruals, reserves, and other expenses |  |  | 4,381 |  |  |  | 3,131 |
Loss and credit carryforwards |  |  | 1,741 |  |  |  | 1,441 |
Amortization |  |  | 4,159 |  |  |  | 9,440 |
Leasing liabilities |  |  | 6,504 |  |  |  | 5,041 |
Unearned revenue |  |  | 3,717 |  |  |  | 3,296 |
Book/tax basis differences in investments and debt |  |  | 9 |  |  |  | 373 |
Capitalized research and development |  |  | 11,442 |  |  |  | 6,958 |
Other |  |  | 426 |  |  |  | 489 |
Deferred income tax assets |  |  | 33,144 |  |  |  | 30,850 |
Less valuation allowance |  |  | (1,045 | ) |  |  | (939 | )
Deferred income tax assets, net of valuation allowance |  | $ | 32,099 |  |  | $ | 29,911 |
Deferred Income Tax Liabilities |  |  |  |  |  |  |  |
Leasing assets |  | $ | (6,503 | ) |  | $ | (4,680 | )
Depreciation |  |  | (3,940 | ) |  |  | (2,674 | )
Deferred tax on foreign earnings |  |  | (1,837 | ) |  |  | (2,738 | )
Other |  |  | (167 | ) |  |  | (89 | )
Deferred income tax liabilities |  | $ | (12,447 | ) |  | $ | (10,181 | )
Net deferred income tax assets |  | $ | 19,652 |  |  | $ | 19,730 |
Reported As |  |  |  |  |  |  |  |
Other long-term assets |  | $ | 22,270 |  |  | $ | 20,163 |
Long-term deferred income tax liabilities |  |  | (2,618 | ) |  |  | (433 | )
Net deferred income tax assets |  | $ | 19,652 |  |  | $ | 19,730 |
Changes in Gross Unrecognized Tax Benefits Related to Uncertain Tax Positions | The aggregate changes in the gross unrecognized tax benefits related to uncertain tax positions were as follows:
(In millions) |  |  |  |  |  |  |  |  |
Year Ended June 30, |  | 2024 |  |  | 2023 |  |  | 2022 |
Beginning unrecognized tax benefits |  | $ | 17,120 |  |  | $ | 15,593 |  |  | $ | 14,550 |
Decreases related to settlements |  |  | (76 | ) |  |  | (329 | ) |  |  | (317 | )
Increases for tax positions related to the current year |  |  | 1,903 |  |  |  | 1,051 |  |  |  | 1,145 |
Increases for tax positions related to prior years (a) |  |  | 4,289 |  |  |  | 870 |  |  |  | 461 |
Decreases for tax positions related to prior years |  |  | (464 | ) |  |  | (60 | ) |  |  | (246 | )
Decreases due to lapsed statutes of limitations |  |  | (12 | ) |  |  | (5 | ) |  |  | 0 |
Ending unrecognized tax benefits |  | $ | 22,760 |  |  | $ | 17,120 |  |  | $ | 15,593 |
(a) Fiscal year 2024 includes unrecognized tax benefits of $3.4 billion related to the acquisition of Activision Blizzard. See Note 8 – Business Combinations for further information.

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