MOVADO GROUP, INC. Note 8. Income Taxes The provision for income taxes for the fiscal years ended January 31, 2001, 2000 and 1999 consists of the  following components  (in thousands) : Deferred income taxes reflect the tax effect of temporary differences between the amount of assets and  liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. Deferred income taxes have been classified as current or noncurrent on the consolidated balance sheets based on the underlying temporary differences and the expected due dates of taxes payable upon reversal. Significant com- ponents of the Company's deferred income tax assets and liabilities for the fiscal year ended January 31, 2001 and 2000 consist of the following  (in thousands) : 2001 Deferred Tax 2000 Deferred Tax Assets Liabilities Assets Liabilities Operating loss carry forwards $1,596 $ 00 0 — $2,706 $00 0 — Rent accrual 143 — 291 — Inventory reserve 2,225 3,502 894 5,340 Receivable allowance 2,183 2,862 1,054 1,278 Depreciation/amortization 1,628 — 1,089 — Other 2,352 — 1,355 — 10,127 6,364 7,389 6,618 Valuation allowance (1,383) — (1,439) — Total $8,744 $6,364 $5,950 $6,618 50 2001 2000 1999 Current: U.S. Federal $3,124 $— $1,500 U.S. State and Local 498 11 444 Non-U.S. 2,607 1,043 1,888 6,229 1,054 3,832 Noncurrent: U.S. Federal — — — U.S. State and Local — — — Non-U.S. 1,674 1,785 1,924 1,674 1,785 1,924 Deferred: U.S. Federal (1,948) (1,518) (750) U.S. State and Local (385) — — Non-U.S. 1,352 107 1,259 (981) (1,411) 509 Provision for income taxes $6,922 $1,428 $6,265