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Uncertain Tax Positions

Wednesday, May 2, 2007

The objective of the FASB project related to uncertain tax provisions is to clarify the criteria for recognition of tax benefits in accordance with FASB Statement No. 109, "Accounting for Income Taxes". The project seeks to clarify what criteria must be met prior to recognition of the financial statement benefit of a position taken in a tax return. On July 14, 2005, the FASB issued an exposure draft for the interpretation of FASB Statement No. 109, "Accounting for Income Taxes". On September 8, 2005, the FRC issued a comment letter on behalf of IMA. The final interpretation (FIN#48 – “Accounting for Uncertainty in Income Taxes”) was issued during June 2006. A copy of the interpretation can be found below.

The FASB issued a proposed FSP that provides for the “effective settlement” of an uncertain tax position upon the completion of an examination by a taxing authority. A copy of the proposed FSP is available below under related documents. IMA’s Financial Reporting Committee submitted a comment letter that addressed all of the pertinent issues in the proposed FSP. The final FSP issued on May 2, 2007 can be found below.

› FASB Interpretation #48 – June 2006 “Accounting for Uncertainty in Income Taxes

› FASB Staff Position – “Definition of Settlement in FASB Interpretation No. 48