Stanu78: MDF taxes
The 10K has a footnote indicating that MDF still has $18.5M in NOL's left at the end of 2004 that expire in various years. That's about $11M less than at the end of 2003. Roughly $3M was applied against 'would be' taxes in 2004, and the other $8M was accrued as a deferred tax asset on the balance sheet.
Therefore, the most likely accounting treatment would be to expense taxes against their newly created deferred tax asset on a quarterly basis, and probably in Q4 recognize a further tax credit based on expectations of future profitability. So no taxes will actually be 'paid' to Uncle Sam, but tax expense will show up and get charged against the deferred tax asset. However by year end, the expense will likely be offset by a new tax credit charged to their remaining $18.5M of NOL's.
However, there are various accounting treatments of this situation as I understand it, and it could be they will leave the deferred tax assets on the balance sheet and reduce their $18.5M of remaining NOL's on a quarterly basis. In this case no tax expense will show up on the income statement. That's evidently what the CEO implied. We'll have to wait for the Q1 earnings report to find out. The good news is that they still have plenty of NOL's.
