FASB gives private companies temporary reprieve from FIN 48
At the October 15, 2008 meeting, the Financial Accounting Standards Board (FASB) redeliberated the scope of the proposed deferral of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, for certain nonpublic entities.
The Board previously had decided at the October 1, 2008 meeting that the deferral should be limited to only pass-through entities. The Board decided to issue a proposed FASB Staff Position (FSP) to defer the Interpretation for all nonpublic entities until fiscal years beginning after December 15, 2008, rather than limiting the deferral to pass-through entities only. As decided at the October 1, 2008 meeting, this proposed FSP will have a 30-day comment period.
The Board will then subsequently issue a separate FSP that will provide guidance for pass-through entities and provide amendments to the existing disclosure requirements for nonpublic entities. The Board expects to finalize and issue this FSP in the first quarter of 2009.
FIN 48 requires companies to report reserves for possible pending income tax issues that might be disallowed at either the federal or state level. This can include a company's claim for potentially disputable credits and deductions, decisions on how and when revenue is reported for tax purposes, or decisions about the tax treatment of a merger or other transactions.