John Deere was founded in 1837 by a blacksmith and inventor who had an idea to help farmers. His ideas would change the face of agriculture for all time. In 2011, John Deere was listed in Fortune magazine amongst the 50 most admired companies and has ranked one of the best 100 global brands. John Deere is expanding overseas and they have just celebrated their 175th anniversary. The deferred tax assets and liabilities for John Deere for the years of 2010 and 2011 are as follows: 2010 Deferred tax assets – $3342
2010 Deferred tax assets – $1009
2011 Deferred tax assets – $3745
2011 Deferred tax liabilities – $1055
Deferred income taxes arise because there are certain items that are treated differently for financial accounting than for income tax reporting purposes. A deferred tax asset is an asset on a company’s balance sheet that may be used to reduce any subsequent period’s income tax expense and a deferred tax liability is an account on a company’s balance sheet that is a result of temporary differences between the company’s accounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year (Investopedia, 2012). The total amount of income tax provisions for 2010 was $1162 and for 2011 it was $1424 (millions). John Deere does have tax loss and tax credit carry-forwards in the amount of $141 for 2010 and $121 for 2011. The procedures for carry-forwards and carrybacks are that net operating loss should first be carried back and applied against taxable income recorded in the two preceding years and any remaining balance should then be carried forward for the next twenty years (Accounting Tools, 2012). John Deere does have several defined benefit pension plans and the postretirement benefit costs for these plans in 2011 were $603 million and $658 million in 2010. Postretirement health benefits are based on discount rates, health care cost trend rates,...