Tax loss carryforward

  
The tax effect of significant temporary differences giving rise to deferred tax assets and liabilities were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Year Ended December 31, |
|   |  | 2021 |  | 2020 |
| (in millions) |  | Deferred Tax Asset |  | Deferred TaxLiability |  | Deferred Tax Asset |  | Deferred TaxLiability |
|  |  |  |  |  |  |  |  |  |
| Commission and bonus accrual |  | $ | 6  |  |  | $ | —  |  |  | $ | 8  |  |  | $ | —  |  |
| Employee benefit accruals |  | 51  |  |  | —  |  |  | 58  |  |  | —  |  |
| Inventory |  | 17  |  |  | —  |  |  | 25  |  |  | —  |  |
| Identifiable intangible assets |  | —  |  |  | 569  |  |  | —  |  |  | 613  |  |
| Insurance premium accruals |  | 3  |  |  | —  |  |  | 3  |  |  | —  |  |
| Miscellaneous accruals |  | 11  |  |  | —  |  |  | 11  |  |  | —  |  |
| Other |  | 17  |  |  | —  |  |  | 11  |  |  | —  |  |
| Unrealized losses included in AOCI |  | 46  |  |  | —  |  |  | 98  |  |  | —  |  |
| Property, plant and equipment |  | —  |  |  | 48  |  |  | —  |  |  | 50  |  |
| Lease right-of-use asset |  | —  |  |  | 47  |  |  | —  |  |  | 42  |  |
| Lease right-of-use liability |  | 47  |  |  | —  |  |  | 42  |  |  | —  |  |
| Product warranty accruals |  | 1  |  |  | —  |  |  | 1  |  |  | —  |  |
| Foreign tax credit and R&D carryforward |  | 49  |  |  | —  |  |  | 60  |  |  | —  |  |
| Restructuring and other cost accruals |  | 5  |  |  | —  |  |  | 9  |  |  | —  |  |
| Sales and marketing accrual |  | 13  |  |  | —  |  |  | 7  |  |  | —  |  |
| Taxes on unremitted earnings of foreign subsidiaries |  | —  |  |  | 5  |  |  | —  |  |  | 6  |  |
| Tax loss carryforwards and other tax attributes |  | 276  |  |  | —  |  |  | 280  |  |  | —  |  |
| Subtotal |  | $ | 542  |  |  | $ | 669  |  |  | $ | 613  |  |  | $ | 711  |  |
| Valuation allowances |  | (267) |  |  | —  |  |  | (287) |  |  | —  |  |
| Total |  | $ | 275  |  |  | $ | 669  |  |  | $ | 326  |  |  | $ | 711  |  |

  
Deferred tax assets and liabilities are included in the following Consolidated Balance Sheets line items at December 31 were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions) |  | 2021 |  | 2020 |
|  |  |  |  |  |
| Assets |  |  |  |  |
| Other noncurrent assets |  | $ | 14  |  |  | $ | 8  |  |
| Liabilities |  |  |  |  |
| Deferred income taxes |  | $ | 408  |  |  | $ | 393  |  |

  
The Company has $45 million of foreign tax credit carryforwards at December 31, 2021, of which $36 million will expire in 2025, $3 million will expire in 2027, and $6 million will expire at various times from 2028 through 2031.  
The Company has tax loss carryforwards related to certain foreign and domestic subsidiaries of approximately $1,278 million at December 31, 2021, of which $1,017 million expires at various times through 2041 and $261 million may be carried forward indefinitely. Included in deferred income tax assets at December 31, 2021 are tax benefits totaling $228 million, before valuation allowances, for the tax loss carryforwards. In addition the Company has recorded a deferred tax asset of $48 million, related to tax attributes.  
The Company has recorded $210 million of valuation allowance to offset the tax benefit of net operating losses, $45 million to offset the tax benefit of foreign tax credits, and $12 million of valuation allowance for other deferred tax assets. The Company has recorded these valuation allowances due to the uncertainty that these assets can be realized in the future.  
The Company has provided $5 million of withholding taxes on certain undistributed earnings of its foreign subsidiaries that the Company anticipates will be repatriated.  
100
