Tax credits in state and foreign jurisdictions

[Table of Contents](#i43adbcd383bc4dc48977980bcb999d17_79) HP INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)Note 6: Taxes on Earnings (Continued)  
  
  
As of October 31, 2021, HP had recorded deferred tax assets for various tax credit carryforwards as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | Carryforward |  | ValuationAllowance |  | InitialYear ofExpiration |
|   | In millions |  |  |
|  |  |  |  |  |  |
|  |  |  |  |  |  |
| Tax credits in state and foreign jurisdictions | $ | 309  |  |  | $ | (52) |  |  | 2022 |
| Balance at end of year | $ | 309  |  |  | $ | (52) |  |  |   |

 Deferred Tax Asset Valuation Allowance The deferred tax asset valuation allowance and changes were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | For the fiscal years ended October 31 |
|   | 2021 |  | 2020 |  | 2019 |
|   | In millions |
| Balance at beginning of year | $ | 7,976  |  |  | $ | 7,930  |  |  | $ | 7,906  |  |
| Income tax (benefit) expense  | (193) |  |  | 74  |  |  | (339) |  |
| Other comprehensive loss (income), currency translation and charges to other accounts | (34) |  |  | (28) |  |  | 363  |  |
| Balance at end of year | $ | 7,749  |  |  | $ | 7,976  |  |  | $ | 7,930  |  |

 Gross deferred tax assets as of October 31, 2021, 2020, and 2019 were reduced by valuation allowances of $7.7 billion,$8.0 billion and $7.9 billion, respectively. In fiscal year 2021, the deferred tax asset valuation allowance decreased by $227 million primarily due to the expected utilization of foreign net operating losses and U.S. deferred tax assets that are anticipated to be realized at a lower effective rate than the federal statutory tax rate. In fiscal year 2020, the deferred tax asset valuation allowance increased by $46 million primarily associated with foreign net operating losses and U.S. deferred tax assets that are anticipated to be realized at a lower effective rate than the federal statutory tax rate due to certain future U.S. international tax reform implications. In fiscal year 2019, the deferred tax asset valuation allowance increased by $24 million primarily associated with the recognition of the income tax consequences of intra-entity transfers other than inventory. This increase was partially offset by the impact of tax rate changes in foreign jurisdictions and state valuation allowance releases. See Note 1, “Summary of Significant Accounting Policies” for detailed information.  87
