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Income Taxes | 6 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes During the second quarters of 2019 and 2018, income tax expense related to continuing operations was $35 million and $122 million. During the first six months of 2019 and 2018, income tax expense related to continuing operations was $122 million and $217 million. Fluctuations in our reported income tax rates are primarily due to the impact of nondeductible impairment charges as well as changes within our business mix of income and discrete items recognized in the quarters. During the first six months of 2019, no tax benefit was recognized for the 2019 first quarter pre-tax charge of $570 million to impair the carrying value of goodwill for our European Pharmaceutical Solutions segment. During the first six months of 2018, no tax benefit was recognized for the 2018 second quarter pre-tax charge of $350 million to impair the carrying value of goodwill for our McKesson Europe reporting unit within our former (prior to the 2019 first quarter realignment in our operating segment structure) Distribution Solutions segment given that these charges were not tax deductible. Refer to Financial Note 3, “Goodwill Impairment Charges,” to the accompanying condensed financial statements appearing in this Quarterly Report on Form 10‑Q. During the second quarter of 2019, we sold software between wholly-owned legal entities within the McKesson group that are based in different tax jurisdictions. The transferor entity recognized a gain on the sale of assets that was not subject to income tax in its local jurisdiction; such gain was eliminated upon consolidation. An entity based in the U.S. was the acquirer of the software and is entitled to amortize the purchase price of the assets for tax purposes. In the second quarter of 2019, in accordance with the recently adopted amended accounting guidance on income taxes, a discrete tax benefit of $42 million was recognized with a corresponding increase to a deferred tax asset for the future tax amortization. On December 22, 2017, the U.S. government enacted comprehensive new tax legislation (the “2017 Tax Act”). The SEC Staff issued guidance on income tax accounting for the 2017 Tax Act on December 22, 2017, which allows companies to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As of September 30, 2018, in accordance with this guidance, we recognized a provisional tax benefit of $1,324 million due to the re-measurement of certain deferred taxes to the lower U.S. federal tax rate and a provisional tax expense of $442 million for the one-time tax imposed on certain accumulated earnings and profits of our foreign subsidiaries. During the second quarter of 2019, we recognized a discrete tax benefit of $15 million for a reduction in the provisional amount for the one-time tax imposed on certain accumulated earnings and profits. Our accounting for the impact of the 2017 Tax Act is incomplete because we have not yet obtained, prepared, or analyzed all the information needed to finalize the accounting requirement. We will continue to assess the income tax effects of the 2017 Tax Act during the measurement period and record any necessary adjustments in the period such adjustments are identified. The 2017 Tax Act made broad and complex changes to the U.S. tax code that affect our fiscal year 2019 in multiple ways, including but not limited to reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; creating the base erosion anti-abuse tax; creating a new provision designed to tax global intangible low-tax income; and generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries. We have estimated the impact of these changes in our income tax provision for the second quarter and first six months of 2019. As of September 30, 2018, we had $991 million of unrecognized tax benefits, of which $828 million would reduce income tax expense and the effective tax rate, if recognized. During the second quarter of 2019, we recognized a $171 million decrease in our unrecognized tax benefits with a corresponding increase in taxes payable due to the issuance of new proposed tax regulations. During the second quarter of 2019, we also recognized a discrete tax benefit of $23 million for a reduction in our provisional amount of unrecognized tax benefits relating to the application of certain provisions of the 2017 Tax Act. During the next twelve months, we do not anticipate a significant increase or decrease to our unrecognized tax benefits based on the information currently available. However, this amount may change as we continue to have ongoing negotiations with various taxing authorities throughout the year and as we complete our accounting related to the impact of the 2017 Tax Act. We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. We are subject to audit by the IRS for fiscal years 2013 through the current fiscal year. We are generally subject to audit by taxing authorities in various U.S. states and in foreign jurisdictions for fiscal years 2010 through the current fiscal year.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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