The Financial Accounting Standards Board recently released FASB Interpretation 48 (FIN 48), which provides guidance on FASB Statement 109 (FAS 109) and describes the standard for recognizing and measuring the benefit or liability from tax positions reflected in financial statements
Information Outside the Financial Statements
(includes examples of program-focused information, statistical highlights and year-end highlights)
Report on line 4 the consolidated net income from the SEC Form 10-K for the financial statement
consolidated group of M, DS1-DS100 and FS1FS50.
Where a loss is not probable, it nonetheless must be disclosed in the financial statements
if "reasonably possible".
The restatement provides that accountants will be held liable to individuals actually known to them or intended third-party users of financial statements
, including members of a "known or intended class" of users of financial statements
But, while the users of public company financial statements
are more easily identifiable, the definition of "user" to a privately held company may vary.
The committee's report recommends actions to improve (1) the financial reporting process, (2) published financial statements
and (3) the conduct of audits.
965(c)(1) term "applicable financial statements
," which comes into play when computing the deduction's upper limit.
Both financial statement
issuers and users -- be they investors, analysts, creditors, or others -- have extensive experience and understanding in the interpretation and application of these statements and the corresponding effect under the Commission's current disclosure rules.
Documenting an understanding with the entity through the use of an engagement letter, preferably signed by management, regarding the services to be performed and the limitations on the use of those financial statements
This decision obscures the traditional definition of what constitutes GAAP and, in addition, introduces financial statement
materiality into the tax law.
We consequently urge the workgroup not to permit needs (or desires) unrelated to the determination of tax liability to impede the adoption of a financial statement
approach to Form 1120.