An Overview of FIN 48 - Accounting for Uncertain Income Tax Positions
In an effort to increase comparability and consistency in how companies report income tax positions on financial statements, the Financial Accounting Standards Board ("FASB") issued on July 13, 2006 FASB Interpretation Number 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes. FIN 48 changes the way companies must account for uncertain tax positions taken on federal, state and local, and international income tax returns for financial reporting purposes. Despite the requests for delay by numerous companies and trade and lobbying groups, the provisions of FIN 48 became effective for fiscal years beginning on or after Dec. 15, 2006. The provisions of FIN 48 apply broadly to all companies that issue financial statements in accordance with generally accepted accounting principles ("GAAP") and that are potentially subject to federal, state and local, or foreign income taxes.