In 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), which establishes accounting and disclosure requirements for uncertain tax positions. FIN 48 applies to all entities that issue GAAP financial statements, including pass-through entities like partnerships and LLCs. Since its issuance, a number of questions have been raised about how to apply the provisions of the interpretation. So far, there aren’t many answers.
As a result, the FASB has deferred the effective date of FIN 48 to annual financial statements for fiscal years beginning after December 15, 2008. The deferral applies to most nonpublic entities with certain exceptions.
If an entity elects to defer adoption of the Interpretation, the entity must disclose its election, as well as its accounting policy for evaluating uncertain tax positions for each set of financial statements were the deferral applies.Categories: Accounting Practices, Controller's Corner, Financial Reporting
Tags: FIN 48, Uncertainty in Income Taxes