Accounting for Income Taxes: Uncertain Tax Positions (FIN 48) (Portfolio 5002)
This Portfolio provides a comprehensive analysis of FASB Interpretation No. 48, addressing the accounting for uncertainty in income taxes recognized in a company’s financial statements.
Bloomberg Tax Portfolio 5002, Accounting for Income Taxes: Uncertain Tax Positions, provides a comprehensive analysis of the treatment of uncertain tax positions under the FASB Accounting Standards Codification.
This Portfolio describes FASB’s two-step process for determining tax benefits that can be reported on the financial statements: (1) recognition—determine if the tax position meets the threshold test of “more likely than not” (MLTN) that the company will be able to sustain the tax return position, based solely on the position’s technical merits; (2) measurement—if the tax position meets the MLTN threshold test, measure the tax benefit as the largest amount of benefit that is cumulatively greater than 50% likely to be realized.
This Portfolio also discusses FASB’s guidance on classification of tax assets and liabilities and the determination and reporting of interest and penalties. It further examines the required qualitative and quantitative disclosures of (1) roll-forwards of all unrecognized tax benefits set out in the form of a reconciliation of the beginning and ending balances of the unrecognized tax benefits on a worldwide aggregated basis; (2) reasonably possible changes in the recognized tax benefits in the next 12 months; and (3) open tax years by major jurisdictions.
This Portfolio may be cited as Bloomberg Tax Portfolio 5002, Dunbar & McEligot, Accounting for Income Taxes: Uncertain Tax Positions (Accounting Policy & Practice Series).
Learn about our smarter, faster approach for calculating corporate income tax provision under ASC 740.
Table of Contents
I. Introduction, Background, and Scope of Portfolio
II. Identification of Tax Positions
III. Recognition Threshold: Evaluating Tax Positions
IV. Measuring Uncertain Tax Benefits
V. Changes in Recognition or Measurement
VI. Accrual of Interest and Penalties
VII. Financial Statement Classification of Unrecognized Tax Benefits
VIII. Financial Statement Disclosures
IX. FIN 48 Adoption Adjustments and Disclosure
University of Connecticut
Deloitte & Touche LLP