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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Taxes | Note 17. Income Taxes U.S and foreign components of consolidated loss before income taxes for the years ended December 2012, 2011 and 2010 was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Income (loss) before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | (16,360 | ) |  | $ | (17,461 | ) |  | $ | (17,256 | )
Foreign |  |  | 685 |  |  |  | 622 |  |  |  | 439 |
Loss before income taxes |  | $ | (15,675 | ) |  | $ | (16,839 | ) |  | $ | (16,817 | )
The provision for income taxes for the years ended December 2012, 2011 and 2010 was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  | $ | 180 |  |  | $ | 143 |  |  | $ | 94 |
Federal |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
State |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total Current |  |  | 180 |  |  |  | 143 |  |  |  | 94 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Federal |  |  | 48 |  |  |  | 0 |  |  |  | 0 |
State |  |  | 14 |  |  |  | 0 |  |  |  | 0 |
Total Deferred |  |  | 62 |  |  | $ | 0 |  |  | $ | 0 |
Provision for income taxes |  | $ | 242 |  |  | $ | 143 |  |  | $ | 94 |
The difference between the provision for income taxes and the amount computed by applying the federal statutory income tax rate to loss before taxes for the years ended December 31, 2012, 2011 and 2010 was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Federal statutory tax |  | ($ | 5,329 | ) |  | ($ | 5,725 | ) |  | ($ | 5,718 | )
Stock-based compensation |  |  | 99 |  |  |  | 83 |  |  |  | 95 |
Lobbying expenses |  |  | 51 |  |  |  | 112 |  |  |  | 112 |
Warrants |  |  | (706 | ) |  |  | (165 | ) |  |  | (13 | )
Research Grant |  |  | 0 |  |  |  | 0 |  |  |  | (166 | )
Gain on investment |  |  | 0 |  |  |  | 0 |  |  |  | (107 | )
Foreign rate differential |  |  | (53 | ) |  |  | (68 | ) |  |  | (56 | )
Expiration of federal net operating losses and credits - tax effected |  |  | 4,352 |  |  |  | 1,744 |  |  |  | (596 | )
Change in valuation allowance |  |  | 1,761 |  |  |  | 4,158 |  |  |  | 6,544 |
Goodwill amortization |  |  | 48 |  |  |  | 0 |  |  |  | 0 |
Other |  |  | 19 |  |  |  | 4 |  |  |  | (1 | )
Provision for income taxes |  | $ | 242 |  |  | $ | 143 |  |  | $ | 94 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at the enacted rates. The significant components of the Company’s deferred tax assets at December 31, 2012 and 2011 were as follows (in thousands):
|  | December 31, |
|  | 2012 |  |  | 2011 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 137,700 |  |  | $ | 137,800 |
Research and development credit carryforwards |  |  | 30,800 |  |  |  | 31,400 |
Capitalized inventory costs |  |  | 900 |  |  |  | 500 |
Inventory reserve |  |  | 700 |  |  |  | 200 |
Capitalized research and development |  |  | 9,100 |  |  |  | 10,300 |
Capitalized trademark |  |  | 400 |  |  |  | 200 |
Capitalized revenue sharing rights |  |  | 300 |  |  |  | 600 |
Asia license intangible |  |  | 100 |  |  |  | 0 |
Deferred compensation |  |  | 4,800 |  |  |  | 4,200 |
Accrued liabilities |  |  | 100 |  |  |  | 400 |
Depreciation |  |  | 1,300 |  |  |  | 1,400 |
Acqusition costs |  |  | 200 |  |  |  | 200 |
Deferred tenant allowance |  |  | 200 |  |  |  | 200 |
Capital loss carryforwards |  |  | 3,900 |  |  |  | 3,900 |
Total deferred tax assets |  |  | 190,500 |  |  |  | 191,300 |
Valuation allowance |  |  | (190,500 | ) |  |  | (191,300 | )
Net deferred tax assets |  | $ | 0 |  |  | $ | 0 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Amortization of goodwill |  | $ | 62 |  |  | $ | 0 |
Total deferred tax liabilities |  | $ | 62 |  |  | $ | 0 |
The valuation allowance decreased by $0.8 million for the year ended December 31, 2012 and increased by $2.0 million and $7.2 million for the years ended December 31, 2011 and 2010, respectively. The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred tax assets such that a full valuation allowance has been recorded. These factors include the Company’s history of net losses since its inception, the need for regulatory approval of the Company’s products prior to commercialization, expected near-term future losses and the absence of taxable income in prior carryback years. The Company expects to maintain a full valuation allowance until circumstances change. Undistributed earnings of the Company’s foreign subsidiary, Cerus Europe B.V., amounted to approximately $2.1 million at December 31, 2012. The earnings are considered to be permanently reinvested and accordingly, no deferred United States income taxes have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to United States income taxes. At the Federal statutory income tax rate of 34%, this would result in taxes of approximately $0.7 million. In the event all foreign undistributed earnings were remitted to the U.S., any incremental tax liability would be fully offset by the Company’s domestic net operating loss. For the year ended December 31, 2012, the Company reported net losses of $15.9 million on its consolidated statement of operations and calculated taxable losses for both federal and state taxes. The difference between reported net loss and taxable loss are due to temporary differences between book accounting and the respective tax laws. At December 31, 2012, the Company had federal and state net operating loss carryforwards of approximately $360.2 million and $293.2 million, respectively. The net operating loss carryforwards for federal and state will expire at various dates beginning in 2018 and 2013, respectively, and ending in 2032. At December 31, 2012, the Company had federal research and development credit carryforwards of approximately $20.5 million that expire in various years between 2018 and 2032. The state research and development credits are approximately $15.6 million as of December 31, 2012 have an indefinite carryforward period. The utilization of net operating loss carryforwards, as well as research and development credit carryforwards, is limited by current tax regulations. These net operating loss carryforwards, as well as research and development credit carryforwards, will be utilized in future periods if sufficient income is generated. The Company believes it more likely than not that its tax positions would be recognized upon review by a taxing authority having full knowledge of all relevant information. The Company’s ability to utilize certain loss carryforwards and certain research credit carryforwards are subject to limitations pursuant to the ownership change rules of Internal Revenue Code Section 382. The Company will recognize accrued interest and penalties related to unrecognized tax benefits in its income tax expense. To date, the Company has not recognized any interest and penalties in its consolidated statements of operations, nor has it accrued for or made payments for interest and penalties. The Company had no unrecognized tax benefits as of December 31, 2012 and 2011. The Company’s tax years 1998 through 2012 remain subject to examination by the taxing jurisdictions due to unutilized net operating losses and research credits.

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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 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 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=6881521&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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: 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 6: 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 7: 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 8: 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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