Son of 96: How the FASB's Exposure Draft Proposes to Change Accounting for Income Taxes

The Financial Accounting Standards Board (FASB) recently completed redeliberating the major issues of an Exposure Draft regarding accounting for income taxes. The draft proposes to supersede FASB Statement 96. Some of the FASB's conclusions are: 1. All potential tax benefits will be recognized...

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Bibliographic Details
Published in:The Journal of bank accounting & auditing 1992-10, Vol.5 (2), p.5
Main Author: Petersen, Richard R
Format: Article
Language:English
Subjects:
Accounting
Balance sheets
Cash surrender value
Changes
Corporate tax planning
Deferred income
Deferred income taxes
Earnings
Exposure drafts
FASB exposure drafts
FASB statements
Financial accounting standards
Financial reporting
Financial statements
Fiscal years
Foreign source income
Foreign subsidiaries
Foreign tax credits
Interperiod tax allocation
Joint ventures
Life insurance
Savings & loan associations
Tax rates
Tax returns
Valuation
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Summary:The Financial Accounting Standards Board (FASB) recently completed redeliberating the major issues of an Exposure Draft regarding accounting for income taxes. The draft proposes to supersede FASB Statement 96. Some of the FASB's conclusions are: 1. All potential tax benefits will be recognized as deferred tax assets and will be immediately evaluated for impairment using a more-likely-than-not standard. 2. Any tax effects of intercompany transactions should be deferred and recognized in the period that the pretax ttransaction is recognized. 3. The historical exchange rate will be used to compute the book basis of the asset in computations of temporary differences related to nonmonetary assets and liabilities of foreign operations for which the US dollar is the functional currency. 4. The Opinion 23 exception for undistributed foreign earnings will be extended to include all "outside" basis differences in foreign subsidiaries and joint ventures.
ISSN:0895-853X