Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Income Taxes

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Note 7 - Income Taxes
9 Months Ended
Sep. 27, 2015
Notes to Financial Statements  
Income Tax Disclosure [Text Block]
7
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Income taxes
 
During the three months ended September 27, 2015 and September 28, 2014, respectively, the Company recorded an income tax expense of $125 and $163, primarily related to minimum taxes and taxes on profits in certain jurisdictions, combined with foreign exchange revaluation and temporary differences on deferred tax assets in Mexico. During the nine months ended September 27, 2015 and September 28, 2014, respectively, the Company recorded a net income tax expense of $395 and $606, primarily related to minimum taxes and taxes on profits in certain jurisdictions, combined with foreign exchange revaluation exchange revaluation and temporary differences on deferred tax assets in Mexico.
 
Tax years 2010 to 2014 remain open for review by the tax authorities in Canada, U.S., Mexico and China. Tax years 2008 to 2014 remain open for Hong Kong.
 
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of its U.S. deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management considers the scheduled reversal of deferred tax liabilities, change of control limitations, projected future taxable income and tax planning strategies in making this assessment. Guidance under ASC 740, Income Taxes, (“ASC 740”) states that forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence, such as cumulative losses in recent years in the jurisdictions to which the deferred tax assets relate. In years 2010 through to 2012, it was determined by management that it was more likely than not that certain deferred tax assets associated with the U.S. jurisdiction would be realized and as such, no valuation allowance was recorded against these deferred tax assets. In 2013, it was determined by management that a partial valuation allowance was required to be recorded against certain deferred tax assets associated with the U.S. jurisdiction as it was not more likely than not to be realized. In 2014, it was determined by management that a full valuation allowance was required to be recorded against the remaining deferred tax assets associated with the U.S. jurisdiction as it was not likely to be realized. For nine months ended 2015, the Canadian and U.S. jurisdictions continue to have a full valuation allowance recorded against the deferred tax assets.