Thursday, January 18, 2007

FASB: Thou Shalt Document Tax Uncertainties

By an unanimous vote, the Financial Accounting Standards Board agreed to implement Interpretation 48 (aka FIN 48) which requires that companies must at least document a range of possible results when taking tax positions with uncertain results (presumably, aggressive tax positions). The FASB, while having some sympathy for businesses and trade organizations opposing the requirements, pointed out that the requirement had been deferred twice and accepted the SEC position that greater uniformity in reporting was needed to improve comparability for investors.

One quick question that comes to mind with this requirement: with IRS personnel theoretically able to look up these disclosures, will companies be less willing to take aggressive positions?


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