ASC 740-10 Accounting for Uncertainty in Income Taxes

ASC 740-10 Accounting for Uncertainty in Income Taxes

ASC 740 (formerly known as FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes or “FIN 48”) establishes a “more-likely-than-not” threshold for the reporting of uncertain tax positions on financial statements. This standard requires new disclosures in annual financial statements, including a reconciliation of total unrecognized tax benefits, classification of income tax-related interest and penalties, years which remain open to examination and unrecognized tax benefits that are expected to significantly change within 12 months of the reporting period.

ASC 740 brings significant changes to tax compliance and financial reporting and requires the design of a comprehensive plan for evaluating and tracking uncertain tax positions. For many companies, development and implementation of this type of plan and associated processes and procedures can be overwhelming, particularly for those subject to multiple tax jurisdictions.

Deep Expertise in ASC 740 Compliance

At MFA, our tax consultants have in-depth knowledge of federal, state, local and international taxation, including considerable experience in ASC 740 tax provisions including conducting ASC 740 position studies and implementation services. We believe that intelligent tax planning and a solid foundation to support your company's position are effective means to reduce your company's exposure. We work closely with you and your advisors to design a customized plan to ensure your positions are structured efficiently and effectively. Whether you are a privately owned, publicly traded or nonprofit organization, MFA has the expertise to assist your company in meeting ASC 740 compliance requirements.

MFA is well versed in the application and interpretation of accounting rules related to income tax positions and, in particular, the new standard for ASC 740 (formerly known as "FIN 48"). We offer services to address a full range of tax requirements relating to ASC 740, including:

  • Overall evaluation of tax positions taken or not taken
  • Determination of "more-likely-than-not" recognition threshold
  • Change and differences related to timing of deductibility
  • Evaluation of recognition and measurement
  • Benefit recognition
  • Derecognition
  • Examination presumption
  • Probability assessment
  • Reconciliation of unrecognized tax benefits
  • Classification of interest and penalties
  • Development of financial statement disclosures
  • Cumulative effect of adoption of ASC 740

RELATED TEAM MEMBERS

Erin Santossio Tax Partner (978) 557-5328
Rosanna DiFilippo Tax Partner (978) 557-5373

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