Read Financial Statement Analysis Case: Homestake Mining company. Then Answer questions a), b) & c) listed under Instructions.

Homestake Mining Company

Homestake Mining Company is a 120-year-old international gold mining company with substantial gold mining operations and exploration in the United States, Canada, and Australia. At year-end, Homestake reported the following items related to income taxes (thousands of dollars).

Total current taxes	$26,349
Total deferred taxes	(39,436)
Total income and mining taxes (the provision for taxes per its income statement)	$(13,087)
Deferred tax liabilities	$303,050
Deferred tax assets, net of valuation allowance of $207,175	95,275
Net deferred tax liability	$207,775
Note 6: The classification of deferred tax assets and liabilities is based on the related asset or liability creating the deferred tax. Deferred taxes not related to a specific asset or liability are classified based on the estimated period of reversal.
Tax loss carryforwards (U.S., Canada, Australia, and Chile)	$71,151
Tax credit carryforwards	$12,007

Instructions

(a)

What is the significance of Homestake's disclosure of Current taxes of $26,349 and Deferred taxes of $(39,436)?

(b)

Explain the concept behind Homestake's disclosure of gross deferred tax liabilities (future taxable amounts) and gross deferred tax assets (future deductible amounts).

(c)

Homestake reported tax loss carryforwards of $71,151 and tax credit carryforwards of $12,007. How do the carryback and carryforward provisions affect the reporting of deferred tax assets and deferred tax liabilities?