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Common Income Tax Accounting Pitfalls Logo aicpa

  Phil Laminack, CPA, and Don Dismuke, CPA |   Free |   AICPA |   08 Dec 2016 |   Tax Insider

This article highlights a few key Accounting Standards Codification (ASC) Topic 740, Income Taxes, tax matters that we have seen numerous companies miss or overlook in tax provisions in recent years, including:

  • Intraperiod tax allocation rules.
  • Hanging credits for indefinite-lived intangibles amid valuation allowance positions.
  • Jurisdictional netting of deferred tax assets and deferred tax liabilities.
  • Improper disclosure of tax attributes and carryforwards.
  • Failure to consider the alternative minimum tax (AMT) when using net operating loss (NOL) carryovers.
  • Improper recognition or derecognition of uncertain tax positions under FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes, which is now mostly incorporated into ASC Subtopic 740-10.
  • Improper disclosure of Accounting Principles Board (APB) Opinion No. 23, Accounting for Income Taxes—Special Areas, positions for indefinite reinvestment of foreign earnings
  • Failure to calculate outside basis difference for nonconsolidated entities, including foreign entities and domestic partnerships
Topics covered:
  • Management accounting: Technical: Tax strategy, planning & compliance: Tax accounting, Intermediate
  • Tax: Technical: Tax accounting: Methods, Intermediate