Making sense of it all
With new guidelines from the SEC, companies are required to properly analyze, document and disclose financial information.
The objectives of accounting for income taxes are to recognize (a) the amount of taxes payable or refundable for the current year and (b) deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an enterprise's financial statements or tax returns.
Accounting for Income Taxes under the Financial Accounting Standards Boards may seem a simple concept but in practice, a technical and often times difficult computation. Managing ASC740 to properly report both deferred and permanent tax differences can be a daunting task. The complexities are compounded with the introduction of SOX 404, FIN 48, reportable transaction and other financial and tax driven changes. Additionally, public companies must now either complete the analysis and work internally or outsource it to a firm other than their independent auditor.
At Acena Consulting, our team of former Big Four Tax professionals has worked with hundreds of public and privately-held companies. International issues, timing difference, changes in tax law and dissecting the intricacies of international taxes versus financial statement reporting are a daily task for our professionals. Let our team help you manage your ASC740 analysis and reporting in an efficient and cost effective manner.
With the implementation of ASC 740, FIN 48 was codified in ASC 740-10-25 to better clarify and recognize the uncertainty in accounting for income taxes recognized in an enterprise’s financial statements.
The goals of financial statement disclosure and taxation will always be different. Yet, because the amount of taxes paid by a company are dependent upon their taxable income and impact financial statements and financial income, proper reporting is critical to financial statement disclosure. Some taxes are paid today, others may be deferred for many years due to various tax regulations, positions taken on a tax return or structures set up by the company to minimize the taxes they pay. Recognizing these complexities, ASC 740-10-25 attempts to give companies guidance on how to properly recognize and account for these tax issues on their financial statements.
Under these new guidelines, a new standard, more-likely-than-not, was introduced and require a two-step approach to analyzing each individual tax position taken by a company. The process requires quantifying the potential impact to the company assuming all parties had full knowledge of all facts of each tax position.
At Acena Consulting, our team of former Big Four tax professionals has worked with hundreds of public and privately-held companies. International issues, timing difference, changes in tax law and dissecting the intricacies of international taxes versus financial statement reporting are a daily task for our professionals. Let our team help you manage your ASC740 analysis and reporting in an efficient and cost effective manner.
A word from just one of our happy customers
Properly complying and taking advantage with the ever increasing complexity of tax laws is vital for my business and therefore requires the utmost professionals on the subject matter. Acena Consulting has been nothing short of exemplary as part of my team in providing the tax services that allows my company to maximize it's bottom line." -C. C., CEO, Integrated Circuit Design Co. Phoenix. As
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