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Accounting for Income Taxes

A Closer Look at ASC 740: Accounting for Income Taxes.

Explore how accounting for uncertain tax positions can help smooth out tax liabilities and improve financial statement transparency in A Closer Look at Accounting for Income Taxes.

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ASC 740 Fundamental Series Part 1: Introduction

ASC 740 is a complex set of guidance. From terms and definitions to calculations and reporting, the financial accounting standard for computing and reporting income tax provisions demands painstaking attention to detail.

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ASC 740 Fundamental Series Part 10: Computing Tax Expense or Benefit

The amount of total income tax expense or benefit shown on the income statement is computed by combining both the current tax expense or benefit and deferred tax expense or benefit. Download A Closer Look at ASC 740 at TaxOps Resources for access to the full series.

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ASC 740 Fundamental Series Part 4: Identifying Permanent and Temporary Differences

Reviewing financial and other company information to identify permanent and temporary differences between book income and taxable income is a critical first step in calculating the income tax provision. Download A Closer Look at ASC 740 at TaxOps Resources for access to the full series.

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ASC 740 Fundamental Series Part 5: Computing Taxes Payable and Receivable

Once the permanent and temporary differences have been identified, current income taxes payable or receivable will need to be computed for the particular tax year. Download A Closer Look at ASC 740 at TaxOps Resources for access to the full series.

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ASC 740 Fundamental Series Part 6: Analyzing Return to Provision

After calculating the current income tax expense, the next step is to calculate the return to provision adjustment. Download A Closer Look at ASC 740 at TaxOps Resources for access to the full series.

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ASC 740 Fundamental Series Part 7: Calculating Deferred Tax Expense or Benefit

The income tax expense or benefit includes not only current income taxes, but also a deferred income tax component. This deferred portion is calculated by analyzing the change in the company's total net deferred income tax asset or liability from the beginning to the end of the reporting period. Download A Closer Look at ASC 740 at TaxOps Resources for access to full ASC 740 series.

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ASC 740 Fundamental Series Part 8: Determining Uncertain Tax Positions

An uncertain tax position is a tax position taken on a previously filed income tax return or included in the current year tax provision that has a less than a 50% chance of being sustained upon examination by the taxing authorities. Download A Closer Look at ASC 740 at TaxOps Resources for access to the full series.

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ASC 740 Fundamental Series Part 9: Determining the Valuation Allowance

The company must determine the realizability of the deferred tax asset calculated in order to determine the amount of valuation allowance that a company should record. Download A Closer Look at ASC 740 at TaxOps Resources for access to the full series.

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ASC 740 Fundamentals Series Part 2: Terms and Definitions

Second in a series on ASC 740 fundamentals. Download A Closer Look at ASC 740 at TaxOps Resources for access to the full series.

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ASC 740 Fundamentals Series Part 3: Frequently Asked Questions

Third in a series on ASC 740 fundamentals. Download A Closer Look at ASC 740 at TaxOps Resources for access to the full series.

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FAF to review accounting for income taxes standard

The Financial Accounting Foundation (FAF) fourth post-implementation review is focused on FASB Statement No. 109, Accounting for Income Taxes, largely codified in Accounting Standards Codification Topic 740, Income Taxes.

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Five Business Tax Issues to Tackle by Year-end 2014

Tax savings come to those who plan. The time is now to make sure your company is acting on available tax-saving measures.

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Income Tax Restatements Second Leading Cause of Financial Restatements

Are you paying enough attention to your company’s income tax provision? Material weaknesses related to ASC 740, Accounting for Income Taxes, are the second leading cause of disclosure in management’s annual report on Internal Controls over Financial Reporting and restatement of financial results, according to the Wall Street Journal CFO.

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Infographic: 10-Steps to ASC-740 Compliance

Subject matter expert John Monahan breaks down the complex rules to 10 quick-start steps to achieving ASC-740 compliance.

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Infographic: Tangible Property Regulations ~ Compliance and Tax Savings 2014

Every business that owns or rents property is subject to tangible property regulations, regardless of size or entity type. Avoid missteps by properly accounting for repairs and improvements.

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Interim Tax Provisions

For entities with a calendar year-end, it's that time of year - time to calculate the second quarter income tax provision. Income tax expense for interim periods is based on an estimated annual effective income tax rate multiplied by the year-to-date ordinary pretax book income.

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IRS Closing the Underpayment Gap with Schedule UTP

In September of 2006, pharmaceutical giant GlaxoSmithKline agreed with the IRS that it had underpaid taxes for prior years totaling approximately $3.4 billion in taxes and interest. While the scale of this particular example may be unusual, underpayments of tax in the millions of dollars are common occurrences when talking about large corporations, trusts, partnerships, and wealthy individuals.

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IRS posts FAQs on uncertain tax position reporting

The Internal Revenue Service has posted a series of questions and answers (FAQs) about the new requirement for large corporations to report their uncertain tax positions.

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IRS Says UTP Descriptions of Some Tax Positions are Too "Concise"

During its review of Schedule UTP (Uncertain Tax Position Statement) filed by taxpayers for the 2010 year, the Internal Revenue Service discovered that descriptions of some disclosed tax positions were more "concise" than they should have been. A new page on its website provides specific examples of acceptable and unacceptable descriptions.

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IRS Transparency Initiative Part I - It's Proposed

On January 26, 2010, the Internal Revenue Service ("IRS") released Announcement 2010-09. The announcement explains the content of a proposed schedule that certain business taxpayers will be required to file with their annual tax returns.

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IRS Transparency Initiative Part II - It's Revised

With the release of Announcement 2010-30, the IRS made it pretty clear they're serious about requiring certain corporations to include in their tax returns a schedule reporting all their uncertain tax positions ("UTPs"). The announcement included Instructions to the Schedule UTP and a draft Schedule UTP, which is required to be filed beginning with the 2010 tax year (i.e. 2011 filing season).

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IRS Transparency Initiative Part III - It's Final

On September 24, 2010, the IRS released the final version of Schedule UTP - the form taxpayers must use to report their uncertain tax positions - and related instructions.

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IRS Updates Statistics on TaxPayers Reporting Uncertain Tax Positions

The Internal Revenue Service has released statistics on taxpayers filing uncertain tax positions (UTP) for the 2011 tax year. Uncertain tax positions can help smooth out tax liabilities and improve financial statement transparency but the requirements of complying with ASC 740 are complex.

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Lower Thresholds Increase Companies Subject to Uncertain Tax Position Filings

The IRS introduced Schedule UTP, Uncertain Tax Position Statement, for certain corporate returns beginning with 2010 tax years.

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Restatements Rise for Biggest U.S. Companies

While the number of restatements filed by public companies fell overall in 2012, filings by some of the largest U.S. companies – such as JPMorgan Chase and others with market capitalizations exceeding $75 million – rose for a second straight year. According to the research firm Audit Analytics, the severity of the mistakes leading to restatements and the ensuing adverse consequences diminished in 2012 with respect to each of the following criteria:

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SEC seeks comments for conflicts minerals reporting Form SD

The Securities and Exchange Commission proposed for comment a new reporting protocol required of oil, gas and mining companies as they report payments to governments.

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Tax Accrual Workpapers Update (Textron)

On August 13, 2009, the U.S. Court of Appeals for the First Circuit ("Court of Appeals") ruled 3-2 to overturn the U.S. District Court for the District of Rhode Island's ("District Court") decision in United States of America vs. Textron, Inc. and Subsidiaries. As a result, Textron's income tax accrual workpapers are subject to an IRS summons.

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TaxOps welcomes new Partner Rachel Sawyer to Federal Tax practice

Award-winning business tax specialty firm adds federal tax partner to meet growing demand for tax services.

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Taxpayers Benefit from Expanded Use of ASC for Research Credits

Temporary regulations give taxpayers the opportunity to use the ASC calculation for a tax year on an amended return.

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Uncertain Tax Positions Can Trigger IRS Audits

A reduced threshold broadens the base of taxpayers that must report uncertain tax positions, thereby exposing these businesses to an increased risk of an IRS audit.

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