The Statement Of Financial Statements

3386 Words Apr 16th, 2015 14 Pages
FIN 48 Summary
At the beginning of November in 2007, the Statement of Financial Statements (SFAS) board decided to postpone the enactment of FIN 48 financial reporting and accounting and income taxes until later that year on December 15, 2007. The purpose of FIN 48 is to force public companies to analyze company’s tax positions and evaluate the probability that their tax position will require them to be audited and if they are audited will their records be sufficient and accurate. If an organization finds that their tax position is likely to not be sustained a liability is created and the tax benefit of their position decreases. Some tax positions that organizations should think about include the choice not to file a return in a certain location, a shift of revenue between tax jurisdictions, the characterization of revenue or a choice to not include reporting taxable income in tax documents. Additionally, a choice to classify a transaction, organization, or other position in a tax return as tax exempt, extra compensation in a C-Corporation, international transfer pricing, Inventory capitalization, and unrelated business income (Feeley & Driscoll, P.C, 2008) Summary
This description of an organizations tax position as a result of FIN 48 is a process that involves two steps, one being recognition and two being measurement. In step one the organization determines how likely it is that their stated tax position will be maintained after being audited. This includes…
Open Document