Global Tax Advisors Need To Understand New Rules Governing U.S. GAAP Accounting for Uncertain Income Tax Positions
In July 2006, the Financial Accounting Standards Board (“FASB”) issued FIN 48 (Accounting for Uncertainty in Income Taxes), effective for fiscal years beginning after December 15, 2006. Under FIN 48, a company may book an income tax benefit on its financial statements only if it is “more likely than not” that the benefit will be sustained if it is examined by a fully informed taxing authority. FIN 48 must be applied by every company that prepares financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”), including all SEC registrants and many non-U.S. owned subsidiaries providing financial statements to U.S. lenders. Global tax advisors will now be expected to conform their advice to the new standards so that their clients can properly compute their tax reserves. View full article (PDF).