12. Income Taxes
|6 Months Ended|
Jul. 02, 2016
|Income Tax Disclosure [Abstract]|
Our overall effective tax rate, based on projected full-year taxable loss, was (33.3)% and (26.2)% for the three months ended July 2, 2016 and July 4, 2015, respectively. Our overall effective tax rate, based on projected full-year taxable loss, was (20.7)% and (28.1)% for the six months ended July 2, 2016 and July 4, 2015, respectively. The effective tax rate varies from the federal statutory rate of 34% due primarily to the impact of lower foreign tax rates, state taxes, share-based compensation and the book income (loss) of consolidated AAP attributable to noncontrolling interest.
We regularly evaluate both positive and negative evidence related to retaining a valuation allowance against our deferred tax assets. The realization of deferred tax assets is dependent upon sufficient future taxable income during the periods when deductible temporary differences and carryforwards are expected to be available to reduce taxable income. We have concluded based on the weight of negative evidence that a valuation allowance should be maintained against certain deferred tax assets that we do not expect to utilize as of July 2, 2016.
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/presentationRef