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Income Taxes | 9 Months Ended
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Sep. 30, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | 11. INCOME TAXES Ambac files a consolidated Federal income tax return with its subsidiaries. Ambac and its subsidiaries also file separate or combined income tax returns in various states, local and foreign jurisdictions. The following are the major jurisdictions in which Ambac and its affiliates operate and the earliest tax years subject to examination:
Jurisdiction |  | Tax Year |
United States |  |  | 2010 |
New York State |  |  | 2008 |
New York City |  |  | 2011 |
United Kingdom |  |  | 2006 |
Italy |  |  | 2007 |
As of September 30, 2013 Ambac had loss carryforwards totaling $6,031,251. This includes carryforwards of $623,446 relating to U.S. capital losses, $311,031 of Ambac UK loss carryforwards, and an ordinary U. S. federal net operating tax carryforward of approximately $5,096,774, which, if not utilized, will begin expiring in 2029, and will fully expire in 2034. The tax effects of temporary differences that give rise to significant portions of the deferred tax liabilities and deferred tax assets at September 30, 2013 and December 31, 2012 are presented below:
|  | Successor Ambac – September 30, 2013 |  |  |  |  | Predecessor Ambac – December 31, 2012 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |
Insurance intangible |  | $ | 567,333 |  |  |  |  | $ | — |
Variable interest entities |  |  | 21,755 |  |  |  |  |  | 22,015 |
Deferred acquisition costs |  |  | — |  |  |  |  |  | 57,262 |
Unearned premiums and credit fees |  |  | 8,453 |  |  |  |  |  | 22,714 |
Unrealized gains on investments |  |  | 12,823 |  |  |  |  |  | — |
Other |  |  | 1,955 |  |  |  |  |  | 17,251 |
Total deferred tax liabilities |  |  | 612,319 |  |  |  |  |  | 119,242 |
Deferred tax assets: |  |  |  |  |  |  |  |  |  |
Unrealized losses & impairments on investments |  |  | — |  |  |  |  |  | 12,605 |
Net operating loss and capital carryforward |  |  | 2,110,938 |  |  |  |  |  | 2,857,926 |
Loss reserves |  |  | 777,991 |  |  |  |  |  | 490,677 |
Compensation |  |  | 8,030 |  |  |  |  |  | 7,184 |
Other |  |  | 3,422 |  |  |  |  |  | 5,687 |
Sub-total deferred tax assets |  |  | 2,900,381 |  |  |  |  |  | 3,374,079 |
Valuation allowance |  |  | 2,289,673 |  |  |  |  |  | 3,256,423 |
Total deferred tax assets |  |  | 610,708 |  |  |  |  |  | 117,656 |
Net deferred tax liability |  | $ | (1,611 | ) |  |  |  | $ | (1,586 | )
In accordance with the Income Tax Topic of the ASC, a valuation allowance is recognized if, based on the weight of available evidence, it is more-likely-than-not that some or all of the deferred tax asset will not be realized. Recent cumulative losses are a significant piece of negative evidence in assessing whether a valuation allowance is required. As a result of Ambac’s history of operating losses as well as the risks and uncertainties associated with future operating results, management believes it is more likely than not that the Company will not generate sufficient taxable income to recover the deferred tax operating asset and therefore has a full valuation allowance.

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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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 + Details
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