|6 Months Ended|
Sep. 30, 2020
|Income Tax Disclosure [Abstract]|
|Income Taxes||Income Taxes
The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate to income (loss) from operations and adjusts the provision for discrete tax items occurring in the period. The Company’s effective tax rate for the three months ended September 30, 2020 was 10% compared to negative 147% for the three months ended September 30, 2019. The effective tax rate was lower than the U.S. statutory tax rate for the three months ended September 30, 2020 because of the tax planning implemented by the Company and tax benefits related to share-based compensation windfalls. The Company’s effective tax rate for the six months ended September 30, 2020 was 23% compared to negative 111% for the six months ending September 30, 2019. The effective tax rate was higher than the U.S. statutory tax rate for the six months ended September 30, 2020 because of the valuation allowance on certain deferred tax assets as well as non-deductible share-based compensation. The effective tax rate for both the three and six months ended September 30, 2019 differed substantially from the U.S. statutory rate due to significant taxes on the Company’s reorganization transactions.
Based on the Company’s review of both positive and negative evidence regarding the realizability of deferred tax assets at September 30, 2020, a valuation allowance continues to be recorded against certain deferred tax assets based upon the conclusion that it was more likely than not that these assets would not be realized. The valuation allowance at September 30, 2020 relates primarily to share-based compensation, capitalized development costs, and foreign tax credits.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted. The Company previously reviewed the CARES Act in the U.S. and determined that there was no significant impact on the Company’s tax provision. The Company continues to analyze these legislative developments and believes they have not had a material impact on the Company’s provision for income taxes for the three and six months ended September 30, 2020.
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://fasb.org/us-gaap/role/ref/legacyRef