FIN 48 Implementation
(April 02, 2008)
In 2006, The Financial Accounting Standards Board (FASB) issued interpretation no. 48, Accounting for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109 (FIN 48). Implementation of FIN 48 was required of all public companies for all periods beginning after December 15, 2006. Thus, most public companies with a December 31 reporting period were required to implement FIN 48 in the first quarter of 2007. The FASB has deferred implementation of FIN 48 for all non-public companies to periods beginning after December 15, 2007.
Although the FASB’s decision may be good news for private companies, it doesn’t mean they can delay thinking about FIN 48 for another year. Private companies should start examining their situations soon to evaluate the potential impact of FIN 48 on their financial statements and to ensure that procedures are in place to gather the information FIN 48 will require.
The tax professionals at Parente Randolph can provide assistance with the FIN 48 implementation process by:
- Developing an inventory of federal, state or international tax positions taken,
- Determining the level of materiality of the tax positions,
- Determining all open tax years,
- Recognizing and measuring uncertain tax positions, and
- Preparing the required disclosures (tabular reconciliations and 12 month disclosures).
Ongoing Maintenance
We can also assist you with the ongoing maintenance required after the adoption of FIN 48. FIN 48 requires the identification of new tax positions and the monitoring and interpretation of tax laws and regulations to determine if an adjustment is required to amounts previously reserved under FIN 48. The ongoing requirement to monitor changes in the tax law and their impact on existing and new tax positions is challenging for both public and private companies. The tax professionals at Parente Randolph have the resources to monitor technical changes at the federal, international, state and local level, and provide the expertise necessary to ensure your company’s continued compliance with FIN 48.
If you have any questions about how FIN 48 affects your company or its financial statements, please contact us. We would be glad to review your situation and help you with the implementation and the ongoing maintenance requirements of FIN 48.
