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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Note 14. Income Taxes U.S and foreign components of consolidated loss before income taxes for the years ended December 31, 2018, 2017 and 2016, was as follows (in thousands):
|  | 2018 |  |  | 2017 |  |  | 2016 |
Loss before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | (58,048 | ) |  | $ | (57,925 | ) |  | $ | (63,246 | )
Foreign |  |  | 713 |  |  |  | 1,227 |  |  |  | 515 |
Loss before income taxes |  | $ | (57,335 | ) |  | $ | (56,698 | ) |  | $ | (62,731 | )
The provision for income taxes for the years ended December 31, 2018, 2017 and 2016, was as follows (in thousands):
|  | 2018 |  |  | 2017 |  |  | 2016 |
Provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  | $ | 225 |  |  | $ | 181 |  |  | $ | 147 |
Federal |  |  | — |  |  |  | — |  |  |  | — |
State |  |  | — |  |  |  | — |  |  |  | — |
Total current |  |  | 225 |  |  |  | 181 |  |  |  | 147 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  |  | — |  |  |  | — |  |  |  | — |
Federal |  |  | 3 |  |  |  | 3,659 |  |  |  | 28 |
State |  |  | 1 |  |  |  | 47 |  |  |  | — |
Total deferred |  |  | 4 |  |  |  | 3,706 |  |  |  | 28 |
Provision for income taxes |  | $ | 229 |  |  | $ | 3,887 |  |  | $ | 175 |
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, 2018, 2017 and 2016, was as follows (in thousands):
|  | 2018 |  |  | 2017 |  |  | 2016 |
Federal statutory tax |  | $ | (12,040 | ) |  | $ | (19,277 | ) |  | $ | (21,329 | )
Tax Act revaluation of deferred taxes |  |  | — |  |  |  | 81,923 |  |  |  | — |
Tax Act deemed income inclusion |  |  | — |  |  |  | 1,083 |  |  |  | — |
Federal research credits |  |  | (1,390 | ) |  |  | (1,000 | ) |  |  | (809 | )
State research credits |  |  | (655 | ) |  |  | (628 | ) |  |  | (449 | )
Expiration of federal carryovers |  |  | 4,154 |  |  |  | — |  |  |  | — |
Expiration of state carryovers |  |  | 1,344 |  |  |  | 1,475 |  |  |  | 1,193 |
Change in valuation allowance |  |  | 9,913 |  |  |  | (59,462 | ) |  |  | 3,940 |
Compensation related items |  |  | (361 | ) |  |  | 1,382 |  |  |  | 484 |
State taxes |  |  | (1,141 | ) |  |  | (803 | ) |  |  | (990 | )
Revision to prior year items |  |  | — |  |  |  | — |  |  |  | 17,200 |
Other |  |  | 405 |  |  |  | (806 | ) |  |  | 935 |
Provision for income taxes |  | $ | 229 |  |  | $ | 3,887 |  |  | $ | 175 |
The Tax Cuts and Jobs Act (the “Tax Act”) resulted in a significant revaluation in the Company’s deferred tax balances as of the date of December 22, 2017, enactment due to the change in the statutory rate. In addition, all of the previously unremitted earnings of Cerus Europe B.V. were deemed to be distributed as of December 31, 2017, which resulted in a one-time deemed income inclusion. 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 and liabilities at December 31, 2018 and 2017, were as follows (in thousands):
|  | December 31, |
|  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 125,016 |  |  | $ | 117,028 |
Research and development credit carryforwards |  |  | 26,705 |  |  |  | 25,061 |
Capitalized research and development |  |  | 15,293 |  |  |  | 17,195 |
Compensation related items |  |  | 8,310 |  |  |  | 7,011 |
Other |  |  | 4,013 |  |  |  | 3,116 |
Total deferred tax assets |  |  | 179,337 |  |  |  | 169,411 |
Valuation allowance |  |  | (179,245 | ) |  |  | (169,332 | )
Net deferred tax assets |  | $ | 92 |  |  | $ | 79 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Amortization of goodwill |  | $ | 127 |  |  | $ | 111 |
Total deferred tax liabilities |  | $ | 127 |  |  | $ | 111 |
The valuation allowance increased by $9.9 million for the year ended December 31, 2018, compared to the decrease of $59.5 million and increase of $3.9 million for the years ended December 31, 2017 and 2016, 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 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 and expected near-term future losses. The Company expects to maintain a valuation allowance until circumstances change. For the year ended December 31, 2018, the Company reported pretax net losses 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 differences between book accounting and the respective tax laws. The Company's tax losses and credits are subject to varying carryforward periods. The gross amounts and dates of expiration of the significant carryforwards are as follows:
|  |  |  |  |  | Expires |  |  | Expires |  |  | Expires |  |  | No |
|  | Total |  |  | 2019-2021 |  |  | 2022-2028 |  |  | 2029-2038 |  |  | Expiration |
Federal losses carryovers |  | $ | 571,992 |  |  | $ | 66,880 |  |  | $ | 171,270 |  |  | $ | 273,585 |  |  | $ | 60,257 |
California loss carryovers |  |  | 59,752 |  |  |  | — |  |  |  | — |  |  |  | 59,752 |  |  |  | — |
Federal research credits |  |  | 18,631 |  |  |  | 5,269 |  |  |  | 7,626 |  |  |  | 5,736 |  |  |  | — |
California research credits |  |  | 10,220 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10,220 |
Federal foreign tax credits |  |  | 610 |  |  |  | — |  |  |  | 610 |  |  |  | — |  |  |  | — |
The Company’s ability to utilize net operating loss and research and development credit carryforwards is limited by (a) its ability to generate future taxable income, (b) varying apportionment and allocation rules including new provisions as part of the Tax Act, and (c) limitations pursuant to the ownership change rules in accordance with Section 382 of the Internal Revenue Code of 1986 and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. The Company’s unrecognized tax benefits relate to federal and California research tax credits. These tax credits have not been utilized on any tax return and currently have no impact on the Company’s tax expense due to the Company’s operating losses and the related valuation allowances. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):
|  | December 31, |  |  | December 31, |
|  | 2018 |  |  | 2017 |
Unrecognized tax benefits at beginning of period |  | $ | 11,062 |  |  | $ | 10,836 |
Decreases related to expired carryforwards |  |  | (401 | ) |  |  | — |
Increases related to prior year tax positions |  |  | — |  |  |  | 19 |
Increases related to current year tax positions |  |  | 402 |  |  |  | 207 |
Unrecognized tax benefits at end of period |  | $ | 11,063 |  |  | $ | 11,062 |
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.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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