XML 38 R16.htm IDEA: XBRL DOCUMENT
v3.19.2

Income Taxes | 9 Months Ended
--- | ---
Jun. 30, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE I – INCOME TAXES Tax Law Changes The Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign sourced earnings. Through September 30, 2018 we recorded provisional amounts for certain enactment date effects of the Tax Act by applying the guidance in SAB 118 because we had not yet completed our enactment date accounting for these effects. During 2019, Ashland completed its internal accounting assessment for the tax effects of enactment of the Tax Act and recorded adjustments to provisional amounts previously recorded. Ashland’s final assessment resulted in net unfavorable tax adjustments of $24 million during the three months ended December 31, 2018 and an unfavorable $6 million during the three months ended June 30, 2019. These adjustments are primarily related to the one-time transition tax assessed on foreign cash and unremitted earnings. There could be additional guidance issued subsequent to December 31, 2018 that could impact our interpretation of the Tax Act and such changes could affect the amounts recorded. The impact, if any, of further transitional tax guidance that may be issued by the U.S. Treasury would be reflected in the Company’s provision for income tax in the period such guidance is effective. Deferred tax assets and liabilities Ashland remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is 21%. Ashland finalized its assessment of the provisional amount previously recorded for the remeasurement of the deferred tax balance which resulted in an unfavorable tax adjustment of $2 million during the three months ended December 31, 2018. Foreign tax effects The one-time transition tax is based on Ashland's total post-1986 earnings and profits of foreign subsidiaries that were previously deferred from U.S. income taxes. Ashland finalized its assessment of the provisional amount previously recorded for this one-time transition tax liability which resulted in an unfavorable tax adjustment of $22 million during the three months ended December 31, 2018 and a $6 million unfavorable tax adjustment during the three months ended June 30, 2019. After these final adjustments, the total obligation for the one-time transition tax was $57 million as of June 30, 2019. No additional income taxes have been provided for any remaining undistributed foreign earnings or any additional outside basis difference, as these amounts continue to be indefinitely reinvested in foreign operations. Ashland determined that the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings calculations and additional outside basis difference is not practicable at this time. Global Intangible Low-Taxed Income Regarding new Global Intangible Low-Taxed Income (GILTI) tax rules, Ashland made an election to treat taxes due on future GILTI exclusions as a current period expense when incurred. Current fiscal year Ashland’s effective tax rate in any interim period is subject to adjustments related to discrete items and the mix of domestic and foreign operating results. The overall effective tax rate was a negative 5% for the three months ended June 30, 2019 and 114% for the nine months ended June 30, 2019. The current quarter tax rate was primarily impacted by income mix, as well as $2 million in net favorable tax discrete items including the favorable adjustment from the release of reserves related to unrecognized tax benefits and the unfavorable adjustment related to transaction tax and other items. The current nine month period was primarily impacted by the items referenced in the three-month period, as well as a net $17 million from unfavorable tax discrete items including the final assessment of the Tax Act and other items. Prior fiscal year The overall effective tax rate was not meaningful for the three months ended June 30, 2018 and a negative 17% for the nine months ended June 30, 2018. The quarter rate was primarily impacted by income mix and net favorable tax discrete adjustments of $5 million related to a state tax rate change and other items. The nine-month period was primarily impacted by the items referenced in the quarter, as well as a net $6 million from unfavorable tax discrete items including the assessment of the Tax Act, the tax rate change in a foreign country, and other items. Unrecognized tax benefits Changes in unrecognized tax benefits are summarized as follows for the nine months ended June 30, 2019.
(In millions) |  |  |
Balance at October 1, 2018 | $ | 164 |
Decreases related to positions taken on items from prior years |  | (3 | )
Increases related to positions taken in the current year |  | 5 |
Lapse of statute of limitations |  | (8 | )
Balance at June 30, 2019 | $ | 158 |
From a combination of statute expirations and audit settlements in the next twelve months, Ashland expects a decrease in the amount accrued for uncertain tax positions of between $2 million and $4 million for continuing operations. It is reasonably possible that there could be other material changes to the amount of uncertain tax positions due to activities of the taxing authorities, settlement of audit issues or the reassessment of existing uncertain tax positions; however, Ashland is not able to estimate the impact of these items at this time.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration