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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes | Note 7 – Income Taxes Income from continuing operations before income taxes was generated in the following jurisdictions:
|  | For the years ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Domestic |  | $ | 6,220 |  |  | $ | 806 |  |  | $ | (576 | )
Foreign |  |  | 19,588 |  |  |  | 12,606 |  |  |  | 15,898 |
Total |  | $ | 25,808 |  |  | $ | 13,412 |  |  | $ | 15,322 |
The provision for income taxes consists of the following:
|  | For the years ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 244 |  |  | $ | 32 |  |  | $ | (148 | )
State |  |  | 443 |  |  |  | 0 |  |  |  | 0 |
Foreign |  |  | 4,933 |  |  |  | 2,461 |  |  |  | 3,646 |
Total current |  |  | 5,620 |  |  |  | 2,493 |  |  |  | 3,498 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (4,543 | ) |  |  | 0 |  |  |  | 0 |
State |  |  | (285 | ) |  |  | 0 |  |  |  | 0 |
Foreign |  |  | 765 |  |  |  | 113 |  |  |  | (38 | )
Total deferred |  |  | (4,063 | ) |  |  | 113 |  |  |  | (38 | )
Total |  | $ | 1,557 |  |  | $ | 2,606 |  |  | $ | 3,460 |
The differences between the income tax provisions computed using the statutory federal income tax rate of 34% and the provisions for income taxes reported in the consolidated statements of operations are as follows:
|  | For the years ended December 31, |
|  | 2011 |  |  | 2010 |  |  | 2009 |
Expected tax at statutory rate |  | $ | 8,775 |  |  | $ | 4,560 |  |  | $ | 5,202 |
Foreign taxes at other rates |  |  | (1,758 | ) |  |  | (1,642 | ) |  |  | (1,822 | )
Change in valuation allowance due to: |  |  |  |  |  |  |  |  |  |  |  |
NOL valuation reserve adjustments |  |  | (1,639 | ) |  |  | (335 | ) |  |  | (315 | )
Utilization of NOL carryforwards |  |  | (4,873 | ) |  |  | (725 | ) |  |  | (170 | )
Generation of NOL carryforwards |  |  | 134 |  |  |  | 157 |  |  |  | 223 |
Prior year tax adjustments |  |  | 171 |  |  |  | 67 |  |  |  | 111 |
Other, net |  |  | 747 |  |  |  | 524 |  |  |  | 231 |
Total |  | $ | 1,557 |  |  | $ | 2,606 |  |  | $ | 3,460 |
Current deferred tax assets and long-term deferred tax liabilities are presented as separate line items in the balance sheet. Long-term deferred tax assets of $2,874 and $708 as of December 31, 2011 and 2010, respectively, are included in other assets, net of accumulated amortization. Current deferred tax liabilities were $269 in 2011 and $299 in 2010 and are included in other accrued liabilities. The deferred income tax balances are comprised of the following:
|  | As of December 31, |
|  | 2011 |  |  | 2010 |
Deferred tax assets: |  |  |  |  |  |  |  |
U.S. net operating loss carryforwards |  | $ | 508 |  |  | $ | 5,273 |
Stock and long-term compensation plans |  |  | 2,815 |  |  |  | 1,538 |
Foreign NOL and other carryforwards |  |  | 2,502 |  |  |  | 1,456 |
US state income taxes |  |  | 286 |  |  |  | 0 |
US alternative minimum tax |  |  | 416 |  |  |  | 180 |
Deferred revenue |  |  | 269 |  |  |  | 259 |
Accrued expenses and other |  |  | 548 |  |  |  | 84 |
Total gross deferred tax assets |  |  | 7,344 |  |  |  | 8,790 |
Less: Valuation allowance |  |  | (2,088 | ) |  |  | (7,713 | )
Net deferred income tax assets |  | $ | 5,256 |  |  | $ | 1,077 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Swiss tax allowances |  | $ | 269 |  |  | $ | 202 |
Intangible assets |  |  | 324 |  |  |  | 180 |
Potential tax on intercompany dividends |  |  | 0 |  |  |  | 97 |
Deferred tax liabilities |  | $ | 593 |  |  | $ | 479 |
At December 31, 2011, we had $9,907 of U.S. net operating loss (NOL) carryforwards, of which, $7,334 represents U.S. tax deductions for employee stock option gains, the tax benefit of which, will be credited to additional paid in capital when the NOL carryforwards are utilized. The U.S. loss carryforwards expire in varying amounts beginning in 2022 and continuing through 2029. If certain substantial changes in the company's ownership were deemed to have occurred, there would be an annual limitation on the amount of the U.S. NOL carryforwards that could be utilized. At December 31, 2010, we had a valuation allowance for all our U.S. deferred tax assets totaling $7,252. In 2011, the tax benefit of utilized U.S. NOL carryforwards was $4,816. We determined that it was more likely than not that the remaining U.S. deferred tax assets would be realized and reversed the entire valuation allowance for U.S. deferred tax assets. At December 31, 2011, we had foreign NOL carryforwards of $5,535 and other foreign deductible carryforwards of $2,770. The foreign NOL carryforwards have no expiration dates and the other deductible carryforwards expire from 2016 to 2018. At December 31, 2011, we had a valuation allowance of $2,088 for certain foreign deferred tax assets. The net change in the valuation allowance for the years ended December 31, 2011, 2010 and 2009 were decreases of $5,625, $550, and $151, respectively. This valuation allowance will be reviewed on a regular basis and adjustments made as appropriate. In addition to the utilization of NOLs in the U.S. and in foreign countries as noted above, the change in the valuation allowance also reflects other factors including, but not limited to, changes in our assessment of our ability to use existing NOLs, changes in currency rates and adjustments to reflect differences between the actual returns filed and the estimates we made at financial reporting dates. For 2011, we have reviewed the NOL carryforwards for each of our entities to determine if it is more likely than not that the NOL carryforward would be utilized in future years. Based on our review, we have reduced income tax expense and the valuation allowance in 2011 by $1,639. The company expects to generate adequate taxable income to realize deferred tax assets in foreign jurisdictions where no valuation reserve exists. The company has not provided deferred U.S. taxes on its unremitted foreign earnings because it considers them to be permanently invested. The unremitted foreign earnings are estimated to be $95,000. It is not practicable to estimate the tax impact related to the repatriation of permanently invested earnings. We had no accrued interest or penalties for income tax liabilities at December 31, 2011. Our policy is to record interest expense and penalties on income taxes as income tax expense. ASC 740-10, Accounting for Uncertainty in Income Taxes sets a "more likely than not" criterion for recognizing the tax benefit of uncertain tax positions. We have identified one such exposure concerning cost allocations related to the implementation of our worldwide strategy related to the ownership of our intellectual property for which we had a reserve of $470 at December 31, 2011 and 2010, which is an offset to our U.S. deferred tax asset. Our primary tax jurisdictions and the earliest year for which tax returns are subject to audit are presented in the following table. VASCO Data Security is abbreviated as "VDS".
Australia |  | VDS Pty. Ltd. |  |  | 2005 |
Austria |  | VDS Austria |  |  | 2006 |
Belgium |  | VDS NV |  |  | 2008 |
Belgium |  | VDS Europe NV |  |  | 2007 |
Belgium |  | Lintel |  |  | 2008 |
Belgium |  | Able NV |  |  | 2006 |
Netherlands |  | VDS BV |  |  | 2003 |
Singapore |  | VDS Asia Pacific |  |  | 2006 |
Switzerland |  | VDS International GmbH |  |  | 2010 |
United States |  | VDS International, Inc. |  |  | 2005 |

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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 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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