| - INCOME TAXES | NOTE 7 - INCOME TAXES The Company adopted the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. As a result of the implementation of ASC 740-10-65-1, the Company recognized no increase in the liability for unrecognized tax benefits. The Company has no tax position at January 31, 2018 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company does not recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at January 31, 2018. The Company's utilization of any net operating loss carry forward may be unlikely as a result of its intended activities. The valuation allowance at January 31, 2018 was approximately $7,631. The net change in valuation allowance during the six months ended January 31, 2018 was $7,261. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of January 31, 2018. All tax years since inception remains open for examination by taxing authorities. 9 CLANCY CORP. NOTES TO THE UNAUDITED FINANCIAL STATEMENTS JANUARY 31, 2018 NOTE 7 - INCOME TAXES (CONTUNUED) The Company has a net operating loss carryforward for tax purposes totaling approximately $36,339 at January 31, 2018, expiring through 2035. There is a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally greater than a 50% change in ownership). Temporary differences, which give rise to a net deferred tax asset, are as follows: As of January 31, 2018 As of July31, 2017 Non-current deferred tax assets: Net operating loss carryforward $ (36,339 ) (1,763 ) Stock based compensation $ - - Inventory obsolescence $ - - Accrued officer compensation $ - - Total deferred tax assets $ (7,631 ) (599 ) Valuation allowance $ 7,631 599 Net deferred tax assets $ - - The actual tax benefit at the expected rate of 21% differs from the expected tax benefit for the six months ended January 31, 2018 as follows: Six months ended January 31, 2018 Six months ended January 31, 2017 Computed "expected" tax expense (benefit) $ (7,261 ) (2,351 ) Penalties and fines and meals and entertainment $ - - Accrued officer compensation $ - - Change in valuation allowance $ 7,261 2,351 Actual tax expense (benefit) $ - - |
