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INCOME TAXES | 12 Months Ended
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Dec. 31, 2011
INCOME TAXES [Abstract] |
Income Tax Disclosure [Text Block] | INCOME TAXES
(a) | Composition of loss from continuing operations before income taxes is as follows:
|  | Year ended December 31,
|  | 2009 |  | 2010 |  | 2011
Domestic |  | $ | (2,564 | ) |  | $ | (7,445 | ) |  | $ | (7,053 | )
Foreign |  | 1,611 |  |  | 335 |  |  | (515 | )
|  | $ | (953 | ) |  | $ | (7,110 | ) |  | $ | (7,568 | )
Income tax expense (benefit) consists of the following:
|  | Year ended December 31,
|  | 2009 |  | 2010 |  | 2011
Current: |  |  |  |  |  |
Federal |  | $ | (550 | ) |  | $ | 190 |  |  | $ | 1,800 |
State and local |  | — |  |  | (3 | ) |  | 2 |
Foreign |  | 81 |  |  | 461 |  |  | 88 |
|  | (469 | ) |  | 648 |  |  | 1,890 |
Deferred: |  |  |  |  |  |  |  |
Federal |  | — |  |  | — |  |  | (14,571 | )
State and local |  | — |  |  | — |  |  | — |
Foreign |  | (250 | ) |  | 23 |  |  | (86 | )
|  | (250 | ) |  | 23 |  |  | (14,657 | )
Total income tax expense (benefit) |  | $ | (719 | ) |  | $ | 671 |  |  | $ | (12,767 | )
(b) | Effective Income Tax Rates
Set forth below is reconciliation between the federal tax rate and the Company’s effective income tax rates with respect to continuing operations:
|  | Year ended December 31,
|  | 2009 |  | 2010 |  | 2011
Statutory Federal rates |  | 34 | % |  | 34 | % |  | 34 | %
Increase (decrease) in income tax rate resulting from: |  |  |  |  |  |  |  |
Tax on foreign activities |  | 75 |  |  | (5 | ) |  | 2 |
Other, net (primarily permanent differences) |  | — |  |  | (3 | ) |  | (2 | )
Valuation allowance |  | (34 | ) |  | (35 | ) |  | 135 |
Effective income tax rates |  | 75 | % |  | (9 | )% |  | 169 | %
(c) | Analysis of Deferred Tax Assets and (Liabilities)
|  | As of December 31,
|  | 2010 |  | 2011
Deferred tax assets consist of the following: |  |  |  |  |  |
Employee benefits and deferred compensation |  | $ | 1,531 |  |  | $ | 1,600 |
Investments and asset impairments |  | 5,519 |  |  | 63 |
Other temporary differences |  | 569 |  |  | 391 |
Net operating and capital loss carryforwards |  | 5,268 |  |  | 2,624 |
|  | 12,887 |  |  | 4,678 |
Valuation allowance |  | (12,522 | ) |  | (3,843 | )
Net deferred tax assets |  | 365 |  |  | 835 |
Deferred tax liabilities consist of the following: |  |  |  |  |  |
Revenue recognition timing differences |  | (138 | ) |  | (539 | )
Installment sale on CoaLogix transaction |  | $ | — |  |  | $ | (1,434 | )
Net deferred assets (liabilities), net |  | $ | 227 |  |  | $ | (1,138 | )
Valuation allowances relate principally net operating loss carryforwards related to the Company's GridSense and USSI subsidiaries and book-tax differences related to stock compensation expense of the Company. The change in the valuation allowance was a decrease of $8,657 in 2011. The decrease in 2011 was primarily attributable to utilization of net loss carryforwards and losses associated with the Company’s investment in Coreworx. Current deferred tax liabilities (see Note 15) is comprised of deferred taxes on the installment sale on the CoaLogix transaction and revenue recognition timing differences net of other temporary differences at DSIT. Deferred tax assets of $440 included in Other Assets relate to primarily to employee benefits at the Company's DSIT.
(d) | Summary of Tax Loss Carryforwards
As of December 31, 2011, the Company had various net operating loss carryforwards expiring as follows:
Expiration |  | Federal* |  | State |  | Foreign
2021-2031 |  | $ | 3,114 |  |  | $ | 7,384 |  |  | $ | — |
Unlimited |  | — |  |  | — |  |  | 3,649 |
Total |  | $ | 3,114 |  |  | $ | 7,384 |  |  | $ | 3,649 |
* The utilization of these net operating loss carryforwards is limited to a total of approximately $243 per year due to limits on utilizing the acquired net operating loss carryforwards under Internal Revenue Service regulations following a change in control.
(e) | Taxation in the United States
On October 22, 2004, The American Jobs Creation Act (the “Act”) was signed into law. The Act includes a deduction of 85% of certain foreign earnings that are repatriated, as defined in the Act. The Company’s foreign earnings are derived from the Company’s Israeli and Australian subsidiaries. Due to Israeli tax and company law constraints and DSIT’s own cash and finance needs as well as GridSense’s cash needs, the Company does not expect any foreign earnings to be repatriated to the United States in the near future. As a holding company without other business activity in Delaware, the Company is exempt from Delaware state income tax. Thus, the Company’s statutory income tax rate on domestic earnings is the federal rate of 34%. As a result of the acquisition of the balance of shares of GridSense not previously owned (see Note 4(a)(ii)), the Company began consolidating the U.S. operations of GridSense beginning in May 2010. As a result of the increased holdings in USSI during 2011 (see Note 4(b)(i)), the Company began consolidating the operations of USSI beginning in February 2011.
(f) | Taxation in Israel
The income of the Company’s Israeli subsidiaries taxed at regular rates. The provisions of the Law for the Amendment the Israel Income Tax Ordinance, 2005, which was passed into law in August 2005, prescribe a progressive reduction of corporate tax liability, resulting in the following rates for 2008 and thereafter: 2008 – 27%, 2009 – 26% and for 2010 and thereafter – 25%. On July 23, 2009, the Israel Economic Efficiency Law (Legislation Amendments for Applying the Economic Plan for 2009 and 2010), became effective, stipulating, among other things, an additional gradual decrease in tax rates in 2011 and thereafter, as follows: 2011 – 24%, 2012 – 23%, 2013 – 22%, 2014 – 21%, 2015 – 20% and 2016 and thereafter – 18%. On October 30, 2011, the Government of Israel adopted the main recommendations of the taxation chapter in the report of the Committee on Social-Economic Change (also known as the Trajtenberg Committee), which were submitted to the government on September 2, 2011. The government resolved, among other things, to set the corporate tax rate to 25% in 2012 and thereafter, instead of 23% in 2012 and a progressive reduction to 18% in 2016, as prescribed by the current legislation. The continued policy of rate reductions will be reconsidered not later than 2014, based on the economic and fiscal conditions of the Israeli economy and global market at that time. On December 5, 2011, the Knesset adopted the committee recommendation and approved the bill to change the tax rate.
(g) | Taxation in Australia
The income of the Company’s GridSense subsidiaries is taxed on their worldwide taxable income at the general corporate tax rate which currently stands at 30%. In addition, certain research and development expenditures may be eligible for increased deduction as well as a refundable rebate at the option of the company. In a situation where the refundable rebate is available, research and development expenses are not deductible and may create taxable income. Refundable rebates are netted against income tax payable if the company has a taxable income after excluding R&D deductions; otherwise the rebate (or excess rebate over income tax payable) is paid to the company. In the Consolidated Statements of Operations, refundable rebates are netted against research and development expense.
(h) | Uncertain Tax Positions (UTP)
As of December 31, 2010 and 2011, the amount of interest and penalties accrued on the balance sheet was $3 and $19, respectively, and is included in other liabilities. Following is a reconciliation of the total amounts of the Company’s unrecognized tax benefits for the period from January 1, 2010 to December 31, 2011:
|  | 2010 |  | 2011
Balance at January 1 |  | $ | 210 |  |  | $ | 18 |
Increases (decreases) in unrecognized tax benefits and associated interest and penalties as a result of tax positions made during the prior period |  | (192 | ) |  | 55 |
Decreases in unrecognized tax benefits and associated interest and penalties as a result of tax positions taken during the current period |  | — |  |  | — |
Balance at December 31 |  | $ | 18 |  |  | $ | 73 |
The Company is subject to U.S. Federal and state income tax, Australian income tax and Israeli income tax. As of January 1, 2012, the Company is no longer subject to examination by U.S. Federal taxing authorities for years before 2008, for years before 2007 for state income taxes, before 2007 for Israeli income taxes and before 2008 for Australian taxes.

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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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