content_image/101830.jpg content_image/101831.jpg content_image/101829.jpg
15. INCOME TAXES 

The provision for income taxes consists of the following (in thousands): 

## YEAR ENDED AUGUST 31, 

<img src='content_image/101830.jpg'>

In connection with a change in accounting principle, the Company also recognized a $1.5 million tax benefit in fiscal 1998. 

The differences between income taxes at the statutory federal income tax rate and income taxes reported in the consolidated statements of income are as follows: 

## YEAR ENDED AUGUST 31, 

<img src='content_image/101831.jpg'>

Goodwill amortization consists of non-deductible goodwill generated by the merger with Covey Leadership Center and certain other acquisitions. During the fiscal years ended August 31, 2000 and 1999, the effect of foreign losses is primarily comprised of losses sustained in Japan, Australia, and New Zealand for which no offsetting tax benefit could be recognized due to uncertainties related to future taxable income to offset such losses. Other items are comprised of various non- deductible expenses that occur in the normal course of business, but which had a magnified effect on the tax rate due to decreased taxable income in fiscal years 2000 and 1999 compared to prior years. 

Significant components of the Company’s deferred tax assets and liabilities are comprised of the following (in thousands): 

## AUGUST 31, 

<img src='content_image/101829.jpg'>

16. CHANGE IN ACCOUNTING PRINCIPLE 

During fiscal 1998, the Emerging Issues Task Force (the “EITF”) of the FASB issued consensus ruling 97-13, which specified the accounting treatment of certain business reengineering and information technology implementation costs. EITF 97-13 requires that certain costs which were previously capitalized to now be expensed as incurred. In addition, any previously capitalized costs that were incurred, and are addressed by EITF 97-13, were required to be written off. 

The Company was involved in a business reengineering and information system implementation project that was principally completed during fiscal 1999. During the Project, the Company capitalized certain costs in accor- dance with accounting principles generally accepted in the United States. Certain previously capitalized costs of the Project were written off in accordance with EITF 97-13 as a cumulative adjustment in the Company’s first quarter of fiscal 1998. During the remainder of fiscal 1998 and during fiscal 1999, the majority of the costs associated with the implementation Project were capitalized in accordance with EITF 97-13 and other related accounting standards. 

