What is deferred tax under SFAS 109?
Under SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
What is statement of financial accounting standards 109 all about?
Abstract- Statement of Financial Accounting Standards (SFAS) 109 aims to clarify the accounting rules covering deferred tax assets. SFAS 109, which was released by the Financial Accounting Standards Board (FASB) in early 1992, supersedes the widely criticized SFAS 96 and becomes effective after Dec 12, 1992.
What are the objectives of accounting for income taxes under SFAS 109?
Under SFAS 109, the objectives of accounting for income taxes are 1) to recognize the amount of taxes payable or refundable for the current year and 2) to recognize deferred tax liabilities or assets for the future tax consequences of events that have been recognized in the financial statements or tax returns.
What is a temporary difference in SFAS 109?
Miscellaneous The meaning of temporary differences in SFAS 109 is the same as in SFAS 96. As with SFAS 96, the list of temporary differences includes some items that are not treated as timing differences under APBO 11. The Board prohibits discounting deferred tax liabilities and assets.
What is FAS 109?
When an entity reported cumulative pretax losses for financial reporting in the current and two preceding years, this should be considered?
Is FASB a negative or positive factor?
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Financial Reporting Developments - Income taxes | EY - US
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Fannie Mae DTA Valuation Allowance Memo
Fannie Mae DTA Valuation Allowance Memo
What is FAS 109?
The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (FAS) No. 109, Accounting for Income Taxes, in February 1992. The purpose of the statement was to establish financial accounting and reporting standards for the effects of income taxes that result from an entity’s activities in the current and preceding years. Throughout this statement, the FASB makes several references to forming a conclusion on the need for a valuation allowance when an entity has recorded cumulative losses in recent years (FAS 109: 23, 99-103). FAS 109 requires a valuation allowance if, based on the weight of available evidence, it is more likely than not that all or some portion of a deferred tax asset will not be realized.
When an entity reported cumulative pretax losses for financial reporting in the current and two preceding years, this should be considered?
In general, the FASB determined that when an entity reported cumulative pretax losses for financial reporting in the current and two preceding years, this should be considered significant negative evidence that a future benefit of deferred tax assets may not exist, and a valuation allowance would be required.
Is FASB a negative or positive factor?
Although the FASB provides a list of negative and positive factors to consider, they advised that an entity must use judgment in determining if a valuation allowance is required (FAS 109: 24, 25).
What Is a Statement of Financial Accounting Standards (SFAS)?
Statements of Financial Accounting Standards (SFAS), published by the Financial Accounting Standards Board (FASB), provided guidance on a specific accounting topic, until 2009. SFAS laid the guidelines for accounting standards in the U.S. These SFAS were published in an effort to update the accounting industry on how to handle certain transactions or events.
Why did the FASB transition to the ASC?
The FASB transitioned to the ASC, the authority of accounting literature, in order to create a single database for accounting standards. The ASC is organized into 90 accounting topics, and notably, its introduction did not change GAAP but instead introduced a new structure for organizing all the information.
What is GAAP financial statement?
GAAP includes standards for how U.S. companies should report their income statement, balance sheet, and statement of cash flows. These financial statements are compiled and used by regulators and investors.
What is FAS 109?
The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (FAS) No. 109, Accounting for Income Taxes, in February 1992. The purpose of the statement was to establish financial accounting and reporting standards for the effects of income taxes that result from an entity’s activities in the current and preceding years. Throughout this statement, the FASB makes several references to forming a conclusion on the need for a valuation allowance when an entity has recorded cumulative losses in recent years (FAS 109: 23, 99-103). FAS 109 requires a valuation allowance if, based on the weight of available evidence, it is more likely than not that all or some portion of a deferred tax asset will not be realized.
When an entity reported cumulative pretax losses for financial reporting in the current and two preceding years, this should be considered?
In general, the FASB determined that when an entity reported cumulative pretax losses for financial reporting in the current and two preceding years, this should be considered significant negative evidence that a future benefit of deferred tax assets may not exist, and a valuation allowance would be required.
Is FASB a negative or positive factor?
Although the FASB provides a list of negative and positive factors to consider, they advised that an entity must use judgment in determining if a valuation allowance is required (FAS 109: 24, 25).
