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Income Taxes | 6 Months Ended
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Mar. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The calculation of the effective tax rate is as follows (in thousands):
| Three months ended March 31, |  | Six months ended March 31,
| 2022 |  | 2021 |  | 2022 |  | 2021
Income (loss) before income taxes | $ | 595 |  |  | $ | (1,171) |  |  | $ | (3,692) |  |  | $ | (1,430) |
Income tax provision (benefit) | 1,812 |  |  | (946) |  |  | 371 |  |  | (841) |
Net loss | $ | (1,217) |  |  | $ | (225) |  |  | $ | (4,063) |  |  | $ | (589) |
Effective tax rate | 305 | % |  | 81 | % |  | (10) | % |  | 59 | %
During interim reporting periods, the provision for income taxes is calculated by applying an estimated annual effective tax rate to year-to-date ordinary pre-tax income (loss). As a result, a significant variation in the customary relationship between income tax expense and pre-tax income may occur. Due to the estimated Research and Development Tax Credit (R&D Tax Credit) as well as the projected utilization of net operating loss carryforwards in Canada that were fully reserved with a valuation allowance, we are projecting an income tax benefit for the full fiscal year ended September 30, 2022, which would result in a negative effective tax rate. When this annual effective tax rate is applied to the year-to-date loss, a tax provision results f or the three and six months ended March 31, 2022. The effective tax rate was largely impacted by the change in the annual estimated relative amounts of income (loss) recognized in the various tax jurisdictions. For the three and six months ended March 31, 2021, the income tax benefit resulted from the relative amounts of income (loss) recognized in various tax jurisdictions, the utilization of net operating loss carryforwards in Canada that have been fully reserved with a valuation allowance, and the estimated R&D Tax Credit. We have recorded valuation allowances against the deferred tax assets of various foreign jurisdictions as it was determined that it was more-likely-than-not that the deferred tax assets may not be recognized. We maintain a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. However, given our current earnings and anticipated future earnings in Canada, we believe that there is a possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the Canadian valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain net deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance released are subject to change on the basis of the level of profitability that we believe we may be able to achieve.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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