10. Income Taxes
|9 Months Ended|
Sep. 30, 2020
|Income Tax Disclosure [Abstract]|
Deferred tax assets and liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company records a valuation allowance against its deferred tax assets as the Company believes it is more likely than not the deferred tax assets will not be realized. The valuation allowance against deferred tax assets was approximately $26.5 million and $25.9 million as of September 30, 2020 and December 31, 2019, respectively.
As of December 31, 2019, the net deferred tax liability of $2.9 million on the condensed consolidated balance sheets is related to book and tax basis differences for intangible assets with indefinite lives. In accordance with ASC 740-10-30-18, the deferred tax liability related to the intangible assets cannot be used to offset deferred tax assets when determining the amount of the valuation allowance for deferred tax assets which are not more-likely-than-not to be realized. This results in a net deferred tax liability, even though the Company has a full valuation allowance on its other net deferred tax assets. During the three and nine months ended September 30, 2020, the related intangible assets were impaired and the net deferred tax liability was eliminated. As a result, the Company recorded an income tax benefit of $2.9 million during the three and nine months ended September 30, 2020. There was no provision for income taxes for the three and nine months ended September 30, 2019 as the Company incurred losses during both periods.
As of September 30, 2020 and December 31, 2019, the Company did not record any unrecognized tax positions.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef