Institute for Supply Management

Schedule D, Part X, Line 2 FIN 48 (ASC 740) footnote

“Income taxes footnote: the institute is generally exempt from federal and state income taxes under the provisions of section 501(c)(3) of the internal revenue code. In addition, the institute has been determined by the internal revenue service (irs) not to be a private foundation. However, the institute is subject to income taxes on unrelated business income, as defined by the irs. At august 31, 2024 and 2023, the institute had no net taxable unrelated business income and accordingly, no provision for income taxes is required in the accompanying consolidated financial statements. The institute adopted the accounting standard on accounting for uncertainty in income taxes (asc 740-10), which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under this guidance, the institute may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods. Management has evaluated the institute's tax positions and concluded that the institute had taken no uncertain tax positions that require adjustment to the consolidated financial statements to comply with the provisions of this guidance. The institute files informational and income tax returns in the u.s. Federal jurisdiction and various state jurisdictions. Generally, the institute is no longer subject to income tax examinations by the u.s. Federal, state or local tax authorities for the years before 2020. Interest and penalties (if any) are accrued as a component of selling, general and administrative expense when assessed. Interest and penalties (if any) are accrued as a component of selling, general and administrative expense when assessed. The institute is subject to a calculation for unrelated business income tax on its collection of net advertising income. At august 31, 2024 and 2023, the institute had net federal loss carryforwards totaling approximately $1,645,000 and $1,645,000, respectively, which begin expiring in fiscal 2026. The net losses have occurred as a result of direct advertising costs exceeding advertising income. The institute is allowed to carryforward these losses to offset future unrelated business income taxes. The deferred tax asset has been reduced to $0 at august 31, 2024 and 2023 by a valuation allowance because management believes it is more likely than not that the operating losses will not be utilized before they expire.”