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Provision for (benefit from) Income Taxes
9 Months Ended
Apr. 30, 2018
Provision for (benefit from) Income Taxes [Abstract]  
Provision for (benefit from) Income taxes

Note 11—Provision for (benefit from) Income taxes

 

The increase in the provision for income taxes in the three months ended April 30, 2018 compared to the same periods in fiscal 2017, and the changes from a benefit from to a provision for income taxes in the nine months ended April 30, 2018 compared to the same periods in fiscal 2017 was primarily due to the jurisdiction in which loss was incurred in the three and nine months ended April 30, 2018 compared to the same periods in fiscal 2017 and our ability to utilize net operating losses the Company holds in those jurisdictions. In addition, the decrease in the Norwegian corporate tax rate from 24.0% to 23.0% resulted in an increase in deferred tax expense of approximately $7,000.

 

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).  The Tax Act significantly revises U.S. corporate income taxation by, among other things, lowering the U.S. corporate income tax rate from 35.0 % to 21.0% effective January 1, 2018. The decrease in the U.S. federal corporate tax rate from 35.0% to 21.0% will result in a blended statutory tax rate of 26.4% for the fiscal year ending July 31, 2018.  The Company does not anticipate any impact to tax expense due to the full valuation allowance of the Company and believes that the most significant impact on its consolidated financial statements will be reduction of approximately $425,000 for the deferred tax assets related to net operating losses and other assets.  Such reduction is offset by changes to the Company’s valuation allowance.

 

In December 2017, the SEC issued Staff Accounting Bulletin 118, which allows a measurement period, not to exceed one year, to finalize the accounting for the income tax impacts of the Tax Act. Until the accounting for the income tax impacts of the Tax Act is complete, the reported amounts are based on reasonable estimates, are disclosed as provisional and reflect any adjustments in subsequent periods as the Company refine its estimates or complete our accounting of such tax effects.