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FAS 109/FIN 48
FAS 109 calculations and the supporting data are detailed and complicated. You can rely on our FAS 109 specialists to provide your company with accurate tax calculation support. We will work with your CFO/tax department to provide our unique blend of FAS 109 knowledge and understanding from both the tax and accounting perspectives. This collaboration will allow your independent auditor to coordinate its audit in a timely and seamless manner.
There are many different elements involved in the FAS 109 calculation, including: the basic FAS 109 calculation, treatment of stock options, deferred compensation, foreign income, the effects of mergers & acquisitions, quarterly calculations, and your tax reserve analysis. We understand the numerous complications that may have an impact on your effective tax rate now and in the future.
FIN 48, Accounting for Uncertainty in Income Taxes, requires all U.S. companies, public and private, to apply a new methodology for evaluating the expected tax benefits from uncertain tax positions.
FIN 48 requires a more rigorous and methodical assessment of financial statement reporting of tax decisions made by companies and it applies to all tax positions accounted for under FASB Statement 109, Accounting for Income Taxes. As a result, companies will need to:
- Document their income tax positions,
- Determine which tax positions may be recognized, and
- Measure uncertain tax position benefits.
Many companies do not have the internal resources to implement FIN 48 effectively. These companies will need to consider engaging an “advisory” accounting firm to assist their accounting and finance personnel in designing and implementing a process to insure compliance with FIN 48 requirements. Your independent audit firm will need to assess the adequacy of the FIN 48 analysis and perform selected audit tests. For public companies, independence requirements may dictate the need for engaging a separate advisory accounting firm from the Company’s auditors to assist in the FIN 48 implementation.