PROVISION FOR INCOME TAXES |
3 Months Ended | ||||||
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Jun. 30, 2026 | |||||||
| Income Tax Disclosure [Abstract] | |||||||
| PROVISION FOR INCOME TAXES |
The Company generally computes its quarterly income tax provision under the effective tax rate method by applying an estimated anticipated annual effective rate to the Company's year-to-date earnings, except for significant and unusual or extraordinary transactions. Losses from jurisdictions for which no benefit can be recognized are excluded from the overall computations of the estimated annual effective tax rate and a separate estimated annual effective tax rate is computed and applied to earnings in the loss jurisdiction. Income tax provision for any significant and unusual or extraordinary transactions are computed and recorded in the period in which the specific transaction occurs. The effective rates for income taxes were 97.4% and 49.0% for the three months ended June 30, 2026 and 2025, respectively. The increase in the Company's effective tax rate was primarily driven by the impact of forecasted current year losses in the United States and Cyprus and associated valuation allowances along with the impact of discrete items as a percentage of the pre-tax results in each period, partially offset by a reduction of forecasted global minimum taxes. Valuation Allowance ASC Topic 740 "Income Taxes" ("Topic 740") requires an evidence based approach when assessing the realizability of deferred tax assets and the need for valuation allowance reserves against those assets. On a quarterly basis, the Company considers available positive and negative evidence, including historical operating performance and expectations of future operating performance when assessing the need for valuation allowances. Topic 740 requires that if the weight of negative evidence is greater than positive evidence, a valuation allowance should be established, which increases income tax expense in the period when such a determination is made. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of June 30, 2026, for all U.S. federal and majority of states, along with certain foreign taxing jurisdictions, the weight of the negative evidence continues to outweigh the positive evidence regarding the realization of these deferred tax assets and the Company has maintained valuation allowances against these assets. The Company will continue to evaluate its ability to realize its net deferred tax assets on a quarterly basis.
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