If you were to prepare or audit financial statements and, in particular, the bal
ID: 2447596 • Letter: I
Question
If you were to prepare or audit financial statements and, in particular, the balance sheet accounts associated with taxes, you may hear reference to “FAS 109,” “FIN 48,” or “FAS 5.” But, in light of the FASB Accounting Standards Codification, those references are antiquated.
1. identify the topics that FAS 109, FIN 48, and FAS 5 each addressed.
2. identify the Codification reference to FAS 109/FIN 48 and FAS 5 (i.e., ASC ____)?
3. identify the Codification section you would review for reporting/measuring a liability for not collecting sales taxes (think Internet seller who might not be collecting sales taxes)?
4. review SAB99. http://www.sec.gov/interps/account/sab99.htm What topic does this address? In your own words, what is the SEC’s staff opinion in this bulletin?
Explanation / Answer
1)FAS 109:
Deffered Tax Assets it is used for the solving interim tax problem by write off and makes carry forward
Deffered Tax Liabilities is shows all taxable interim variation.
FIN 48:
Accounting for UNcertainity in Income tax it is used to calculate taking back some amount as tax return.
FAS 5
Accounting for Contigencies:
It is can be used for calculating hypothentical profit or loss.
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2)FAS 109/FIN 48 = codified at ASC 740-10
FAS 5 =ASC 450
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