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CCH Accounting for Income Taxes (2014)

CCH Accounting for Income Taxes (2014)

Name: CCH Accounting for Income Taxes (2014)
Brand: CCH U.S.
SKU: 9780808033721
Price: 2842.10 HKD
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Author: Richard R. Petersen
ISBN: 9780808033721

By Richard R. Petersen

CCH U.S. June 2013

Specifications

ISBN-13: 9780808033721
Publisher: CCH U.S.
Publication: June 2013
Format: Paperback , 480 pages
Jurisdiction: U.S. ? Countri(es) for reference only

Details

CCH Accounting for Income Taxes provides guidance on the application of Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 740, Income Taxes. It also addresses income tax-related paragraphs in certain other Codification topics, including Topic 805, Business Combinations, and Topic 980, Regulated Operations. This publication presents the author's interpretation on areas that have not been specifically addressed by the Codification or that require further explanation. The analysis in this publication is based on discussions with the staffs of the FASB and the Securities and Exchange Commission (SEC), combined with lessons learned from leading accounting practitioners.

Appendix I includes a series of interpretations of income tax-related paragraphs that are located in other topics in the Codification. Appendix II, "Index of Accounting Literature Cited," includes cross-references to the interpretations that either refer to or incorporate the pre-Codification authoritative pronouncement or interpretive literature, in whole or in part, that was not codified by the FASB into its Codification. The FASB decided to exclude “nonessential material,such as redundant summaries of existing standards, historical content, discussions of previous practice, summaries of constituent feedback, and similar content." However, we believe such information may be useful to readers of this publication. Appendix III contains recent examples reflecting how various U.S. public entities have disclosed the information required by Topic 740.

SECTION I: INTERPRETATIONS OF TOPIC 740, INCOME TAXES

Income Tax—Overall (740-10)
Section 740-10-05: Overview and Background—General
Section 740-10-10: Objectives—General
Section 740-10-15: Scope and Scope Exceptions—General
740-10-15-2.A: Not-for-Profit Entities: Tax on Investment Income
740-10-15-2.B: Applicability of the Provisions in Subtopic 740-10 Related to Uncertain Tax Positions to Entities That Typically Are Not Taxpayers
740-10-15-3.A: Mexican Profit-Sharing Arrangements
740-10-15-3.B: Michigan Business Tax
740-10-15-3.C: Accounting for Investments in Non-Consolidated Tax-Advantaged Limited Partnerships (Such as Investments in Affordable Housing Projects)
740-10-15-3.D: Mexican Flat Tax
740-10-15-4.A: Taxes Assessed on Dividends
740-10-15-4.B: Texas State Franchise Tax
740-10-15-4.C: Attribution of Income Taxes to the Entity or Its Owners
Section 740-10-20: Glossary
Section 740-10-25: Recognition—General (Exceptions to the Basic Requirements)
740-10-25-3.A: Safe Harbor Leases
740-10-25-3.B: Identified Intangible Assets That Are Not Amortizable for Tax Purposes
740-10-25-3.C: Computation of Deferred Taxes Related to Identified Intangible Assets That Are Not Amortizable for Tax Purposes
740-10-25-3.D: Reorganization Value in Excess of Amounts Allocable to Identified Assets
740-10-25-3.E: Applicability of Paragraph 740-10-25-3(f) to U.S. GAAP Financial Statements of Non-U.S. Entities, Including Financial Statements of Non-U.S. Entities Operating in Highly Inflationary Economies
740-10-25-3.F: Nonmonetary Assets and Liabilities of Foreign Operations for Which the Local Currency Is Not the Functional Currency
740-10-25-3.G: Inflationary Profits Tax in Countries with Hyperinflation
740-10-25-3.H: Effect of a Change in an Important Assumption on the Accounting for Leveraged Leases
740-10-25-3.I: Distinguishing Foreign From Domestic Subsidiaries
740-10-25-3.J: Temporary Differences Related to CTA
740-10-25-3.K: Deferred Tax Accounting for "Outside Basis Differences" When a Change From Consolidation to Equity or Cost Method of Accounting Occurs
740-10-25-3.L: Subtopic 740-30 Exception Related to the Tax Bad Debt Reserve of a Savings and Loan Association
740-10-25-3.M: Scope of Subtopic 740-30 Exception Related to Investments in Foreign Subsidiaries
740-10-25-3.N: Monetary Restatement of Fixed Assets in Italy
740-10-25-3.O: Recognition of a Deferred Tax Liability for a Portion of an Outside Basis Difference
740-10-25-3.P: Dividends Received Deduction on the Repatriation of Certain Foreign Earnings Allowed by the 2004 Tax Act (Recognition Threshold for Uncertain Tax Positions)
740-10-25-3.Q: Intercompany Transfers of Intellectual Property
740-10-25-6.A: Effective Date for Nonpublic Entities Regarding Provisions of Subtopic 740-10 Related to Uncertain Tax Positions
740-10-25-6.B: Treatment of Subsequent Events at Transition to the Provisions of Subtopic 740-10 Related to Uncertain Tax Positions
740-10-25-7.A: Administrative Practices and Precedents
740-10-25-10.A: Effectively Settled through Examination, Negotiation, or Litigation
740-10-25-13.A: Unit of Account
740-10-25-14.A: Consideration of Subsequent Events Differs From Topic 450, Contingencies
740-10-25-17.A: Interaction Between Net Operating Loss Carryforwards and Liabilities for Unrecognized Tax Benefits (Temporary Differences)
740-10-25-23.A: Accounting for Temporary Differences in Monetary Assets and Liabilities Caused by Changes in Currency Exchange Rates When an Entity's Functional Currency Is Different From Its Local (Tax Reporting) Currency
740-10-25-23.B: Identifying Temporary Differences in Tax Systems That Exclude Significant Types of Income or Expense From the Computation of the Base Amount Subject to Tax
740-10-25-29.A: Accounting for Temporary Differences and Carryforwards Acquired Other Than in a Business Combination
740-10-25-30.A: Basis Differences of Regulated Investment Companies, Cooperatives, and Similar Entities
740-10-25-30.B: Determining If a Basis Difference Is a Taxable Temporary Difference
740-10-25-30.C: Accounting for the Effects of Temporary Differences During a Tax Holiday
740-10-25-30.D: Accounting for the Tax Consequences of the Medicare Prescription Drug, Improvement and Modernization Act of 2003
740-10-25-30.E: Corporate Owned Life Insurance (Changes in Tax Status)
740-10-25-32.A: Common Control Merger of Taxable and Nontaxable Entities (Investment Tax Credits)
740-10-25-46.A: Distinguishing Investment Tax Credits From Government Grants (Interest and Penalties)
740-10-25-56.A: Capitalization of Interest
740-10-25-56.B: Ratio of Earnings to Fixed Charges
740-10-25-56.C: Interest Income Related to Income Tax Uncertainties
Section 740-10-30: Initial Measurement—General (Uncertain Tax Positions)
740-10-30-3.A: Effect of Noncontrolling Interests in Subsidiary Tax Pass-Through Entities
740-10-30-7.A: Example of How to Measure the Tax Benefits to Be Recognized Under Subtopic 740-10740-10-30-7.B: All Income Tax Uncertainties Need to Be Accounted for Pursuant to Subtopic 740-10 (Applicable Tax Rates)
740-10-30-8.A: Losses of a Foreign Branch
740-10-30-8.B: State Apportionment Factors
740-10-30-9.A: Percentage Depletion
740-10-30-9.B: Small Life Insurance Entities
740-10-30-9.C: Canadian Crown Royalties and Resource Allowance
740-10-30-9.D: Effect of Changes in the Estimated Graduated Tax Rate
740-10-30-9.E: Measuring Deferred Taxes When Different Tax Rates Are Applied to Distributed and Undistributed Earnings
740-10-30-9.F: Qualified Production Activities (Establishment of a Valuation Allowance)
740-10-30-17.A: Deferred Tax Assets Resulting From OPEB Liabilities
740-10-30-17.B: Temporary Differences Related to Mexican Inventories
740-10-30-17.C: Limitations on Future Events Anticipated When Assessing the Realizability of Deferred Tax Assets
740-10-30-17.D: Valuation Allowance: Recognizing Impairment of Deferred Tax Assets Compared With Impairment of Long-Lived Intangible Assets
740-10-30-18.A: Sources of Taxable Income
740-10-30-18.B: AMT Credit Carryforwards and Valuation Allowances
740-10-30-18.C: Consideration of Deferred Tax Liabilities Related to Investments in Leveraged Leases When Assessing the Need for a Valuation Allowance for Deferred Tax Assets
740-10-30-18.D: Consideration of "Held-to-Maturity" Securities When Assessing the Need for a Valuation Allowance for Deferred Tax Assets
740-10-30-18.E: RAP/GAAP Differences for Financial Institutions
740-10-30-18.F: Accounting for Deferred Tax Assets Related to Available-for-Sale Debt Securities
740-10-30-19.A: Changing the Timing or Character of Future Taxable Income
740-10-30-19.B: Using the Sale of Appreciated Operating Assets as a Tax-Planning Strategy
740-10-30-19.C: The Effect of Uncertainty on Tax-Planning Strategies
740-10-30-19.D: Income Statement Classification of Direct Costs of Executing a Tax Strategy
740-10-30-21.A: Definition of Cumulative Losses in Recent Years
740-10-30-21.B: Significance of Cumulative Losses in Recent Years
740-10-30-21.C: Other Examples of Negative Evidence
740-10-30-21.D: Going-Concern Report as Negative Evidence
740-10-30-22.A: Appreciation in Market Value of an Asset as Positive Evidence
740-10-30-22.B: Forecast of Future Income as Positive Evidence (Separate Financial Statements of a Component of a Consolidated Group)
740-10-30-27.A: Allocating Taxes Among Members of the Consolidated Group
740-10-30-27.B: Examples of Separate Return and Pro Rata Allocation Approaches 740-10-30-27.C: Valuation Allowances in Separate Entity Financial Statements
740-10-30-27.D: Change in Method of Intercorporate Tax Allocation
740-10-30-27.E: Subpart F Income
740-10-30-27.F: Tax Effects of Push Down of Debt in an Acquisition
740-10-30-27.G: Presenting Income Taxes in Carveout Financial Statements
740-10-30-27.H: Presenting Income Taxes in the Separate Financial Statements of a Single Member LLC
Section 740-10-35: Subsequent Measurement—General
Section 740-10-40: Derecognition—General
Section 740-10-45: Other Presentation Matters—General (Statement of Financial Position Classification)
740-10-45-4.A: Classification of Deferred Taxes Related to LIFO Inventory
740-10-45-5.A: Effect of a Valuation Allowance on Financial Statement Classification
740-10-45-9.A: Current/Noncurrent Classification of Tax Carryforwards
740-10-45-9.B: Presentation of Deferred Taxes Related to Intercompany Profits
740-10-45-11.A: Determining the Current Portion of the Liability for Unrecognized Tax Benefits
740-10-45-11.B: Balance Sheet Classification of Long-Term Liabilities for Unrecognized Tax Benefits (Change in Tax Law or Rates)
740-10-45-15.A: Changes in Tax Law
740-10-45-15.B: Effect of Tax Law Change on Current Tax Provision
740-10-45-15.C: Calculation of the Effect of the Increase in Corporate Tax Rates
740-10-45-15.D: Effect of Tax Law Changes on Items Other Than Income From Continuing Operations in the Year of the Change
740-10-45-15.E: Computing the Effect of the Tax Law Change on Certain Business Combinations
740-10-45-15.F: Presentation of Effect of Tax Law Change in the Income Statement
740-10-45-15.G: Accounting for Rate Regulation Implication of a Tax Rate Change
740-10-45-15.H: Determining the Enactment Date in Tax Jurisdictions Outside of the United States (Income Statement Classification of Penalties and Interest)
740-10-45-25.A: Changing Accounting Policies for Penalties and Interest Section 740-10-50: Disclosure—General
740-10-50-2.A: Classification of Liabilities for Tax Contingencies
740-10-50-2.B: Level of Detail in Determining Deductible and Taxable Temporary Differences
740-10-50-2.C: Disclosure of Certain Significant Risks and Uncertainties
740-10-50-2.D: SEC Schedule of Valuation Allowances
740-10-50-2.E: Additional Disclosures for SEC Registrants
740-10-50-6.A: Level of Detail of Types of Temporary Differences
740-10-50-6.B: Disclosure of Carryforwards
740-10-50-6.C: Direct Financing or Sales-Type Lease Temporary Differences
740-10-50-9.A: Interest and Penalties
740-10-50-9.B: Disclosure of the Effect of the Change in Tax Rates on Deferred Tax Liabilities and Assets
740-10-50-9.C: Disclosures Related to Tax Benefits From Share-Based Payments
740-10-50-12.A: Effective Tax Rate Reconciliation: Change in Valuation Allowance
740-10-50-12.B: Effect of Noncontrolling Interests in Subsidiary Tax Pass-Through Entities on the Effective Tax Rate Reconciliation
740-10-50-14.A: Disclosure of Future Taxable Income Assumptions
740-10-50-14.B: Disclosures Related to Safe Harbor Leases
740-10-50-14.C: Disclosure of the Effect of a Change in Tax Law or Rates on Leveraged Leases
740-10-50-15.A: Amounts Included in the Tabular Rollforward
740-10-50-15.B: Effective Tax Rate Disclosure
740-10-50-15.C: Treatment of the Federal Tax Benefit From State Tax Expense
740-10-50-16.A: Disclosure of Public Partnership Basis Differences
740-10-50-17.A: Required Disclosures in Separate Entity Financial Statements
Section 740-10-55: Implementation Guidance and Illustrations—General
Section 740-10-60: Relationships—General
Section 740-10-S20: Securities and Exchange Commission Sections—Glossary
Section 740-10-S25: Securities and Exchange Commission Sections—Recognition
Section 740-10-S50: Securities and Exchange Commission Sections—Disclosures
Section 740-10-S55: Securities and Exchange Commission Sections—Implementation Guidance and Illustrations
Section 740-10-S99: Securities and Exchange Commission Sections—SEC Materials
Income Tax—Intraperiod Tax Allocation (740-20)
Section 740-20-05: Overview and Background—General
Section 740-20-15: Scope and Scope Exceptions—General
Section 740-20-20: Glossary
Section 740-20-45: Other Presentation Matters—General
740-20-45-3.A: Subsequent Recognition of Tax Benefits Existing at the Date of Emerging From Bankruptcy
740-20-45-3.B: Order of Recognition of Pre and Post Quasi-Reorganization Tax Benefits
740-20-45-3.C: Tax Effects of Gains and Losses Included in Comprehensive Income but Excluded From Net Income
740-20-45-3.D: Tax Effects of Gains and Losses Included in Comprehensive Income but Excluded From Net Income When There Is a Change in Tax Rates or Laws
740-20-45-3.E: Tax Benefit Substitution
740-20-45-8.A: Computation of the Incremental Effect of an Item Other Than Income From Continuing Operations
740-20-45-8.B: Exceptions to the General Rule That the Tax Effect of an Item Other Than Income From Continuing Operations Is Computed as the Incremental Tax Effect of That Item
740-20-45-8.C: Intraperiod Tax Allocation of Changes in Valuation Allowances
740-20-45-8.D: Valuation Allowance Required Due to Spinoff
740-20-45-8.E: Change in Tax Basis of Assets and Liabilities as a Result of a Spinoff
740-20-45-8.F: Adjustments of Prior Interim Period's Intraperiod Tax Allocation
740-20-45-8.G: Intraperiod Tax Allocation of Changes in Valuation Allowances Due to Net Unrealized Losses on Available-for-Sale Securities
740-20-45-8.H: Income Statement Presentation in the Consolidated Financial Statements of a Subsidiary's Deferred Tax Assets and Liabilities When That Subsidiary Is Sold
740-20-45-8.I: Intraperiod Tax Allocation of Income Tax Uncertainties
740-20-45-8.J: Allocation of Income Taxes to a Cumulative Effect of a Change in Accounting Reflected Directly to Beginning of the Period Retained Earnings
740-20-45-8.K: Accounting for the Income Tax Consequences of Transactions With Noncontrolling Interest Holders
740-20-45-11.A: Tax Effects of Stock Issuance to Acquire an Asset
740-20-45-11.B: Timing of Recognition of "Excess" Tax Benefits Related to Employee Share-Based Payments
740-20-45-11.C: Accounting for the Tax Effects of Employee Share-Based Payments Prior to Exercise
740-20-45-11.D: Effect on Diluted EPS Calculation of Excess Tax Benefits or Shortfalls of Tax Benefits From Stock Plans
740-20-45-11.E: Transactions Among (and With) Shareholders That Have Tax Effects for the Entity
740-20-45-11.F: Tax Effects of Debt With Detachable Warrants
740-20-45-11.G: Tax Effects of an Induced Conversion of Convertible Debt
740-20-45-11.H: Classification in the Statement of Cash Flows of the Income Tax Benefit Realized on Exercise of a Nonqualified Employee Share Option
740-20-45-11.I: Incentive Stock Options and Employee Stock Purchase Plans
740-20-45-11.J: Accounting for the Shortfall in Tax Benefits Associated With an Equity Award
740-20-45-11.K: Income Tax Consequences of Issuing Convertible Debt With a Beneficial Conversion Feature
740-20-45-11.L: Income Tax Benefits of Dividends on Share-Based Payment Awards
Section 740-20-55: Implementation Guidance and Illustrations—General
Section 740-20-60: Relationships—General Income Tax—Other Considerations or Special Areas (740-30)
Section 740-30-05: Overview and Background—General
Section 740-30-15: Scope and Scope Exceptions—General
Section 740-30-20: Glossary
Section 740-30-25: Recognition—General
740-30-25-5.A: Tax Effects of Investments in Partnerships
740-30-25-5.B: Measurement of Deferred Tax Liabilities and Assets Related to Investments in Equity Method Investees
740-30-25-7.A: Excess of Financial Reporting Basis Over Tax Basis (or Vice Versa) of Investments in Subsidiaries ("Outside" Basis Differences)
740-30-25-7.B: Accounting for Outside Basis Differences Caused by a Subsidiary's Inside Basis Differences
740-30-25-7.C: Deferred Tax Accounting on Inside Basis Differences of a Subsidiary in the Consolidated Financial Statements of the Parent
740-30-25-7.D: Deferred Tax Accounting for Investments in Entities Consolidated Pursuant to the Variables Interest Entities Subsections of Topic 810, Consolidation
740-30-25-8.A: Acquisition of Noncontrolling Interest of a Subsidiary at an Amount in Excess of Book Value
740-30-25-9.A: Foreseeable Future
740-30-25-9.B Recognition of Deferred Tax Assets for a Parent Entity's Excess Tax Basis in the Stock of a Subsidiary That Is Accounted for as a Discontinued Operation
740-30-25-9.C: Foreseeable Future and the Realization of Tax Benefits in One of Two Jurisdictions
Section 740-30-45: Other Presentation Matters—General
Section 740-30-50: Disclosure—General
740-30-50-2.A: Subtopic 740-30 Disclosure of Outside Basis Differences Income Tax—Interim Reporting (740-270)
Section 740-270-05: Overview and Background—General
Section 740-270-15: Scope and Scope Exceptions—General
Section 740-270-20: Glossary
Section 740-270-25: Recognition—General
740-270-25-7.A: Changes in Valuation Allowances During Interim Periods
Section 740-270-30: Initial Measurement—General
740-270-30-4.A: Definition of Ordinary Income
740-270-30-6.A: Effect of Noncontrolling Interests in Subsidiary Tax Pass-Through Entities on the Estimated Annual Effective Tax Rate Used to Determine Income Tax Expense or Benefit in Interim Periods
740-270-30-6.B: Effect of the Purchase of a Noncontrolling Interest in Tax Pass-Through Subsidiary on the Estimated Annual Effective Tax Rate
740-270-30-6.C: Effect of a Business Combination on the Estimated Annual Effective Tax Rate
740-270-30-10.A: Items Excluded From the Estimated Annual Effective Tax Rate
740-270-30-18.A: Changes in a Valuation Allowance in Interim Periods Subsequent to a Quasi-Reorganization, or Fresh-Start Accounting
740-270-30-18.B: When to Use the Discrete Method to Recognize the Income Tax Effects of Ordinary Income
Section 740-270-35: Subsequent Measurement—General
Section 740-270-45: Other Presentation Matters—General
Section 740-270-50: Disclosure—General
Section 740-270-55: Implementation Guidance and Illustrations—General

SECTION II: FUTURE EXPECTATIONS AND PROJECTS

Recent Developments

SECTION III: APPENDICES

Appendix I: Interpretations of Income Tax-Related Paragraphs in Selected Other Topics
Topic 805, Business Combinations
Section 805-740-05: Overview and Background—General
Section 805-740-15: Scope and Scope Exceptions—General
Section 805-740-20: Glossary
Section 805-740-25: Recognition—General
805-740-25-3.A: Reduction of Acquiring Entity's Valuation Allowance as a Result of a Business Combination
805-740-25-3.B: Step Acquisitions
805-740-25-3.C: Accounting for Preacquisition Income Tax Contingencies (and Contingencies Arising From the Acquisition)
805-740-25-3.D: Acquired Subtopic 740-30 Differences
805-740-25-3.E: Accounting for Differences Between the Financial Reporting and Tax Bases of Goodwill When Goodwill Is Amortizable for Tax Purposes
805-740-25-3.F: Accounting for the Tax Benefits of Share-Based Awards Issued in a Business Combination
805-740-25-3.G: Accounting for the Income Tax Consequences of Acquisition-Related Costs
805-740-25-3.H: Accounting for the Deferred Tax Consequences of Contingent Consideration Arrangements
805-740-25-3.I: Accounting for the Deferred Tax Consequences of Acquired Contingent Assets and Assumed Contingent Liabilities
Section 805-740-30: Initial Measurement—General
805-740-30-3.A: Changes to the Acquiring Entity's Valuation Allowance During the Measurement Period
Section 805-740-35: Subsequent Measurement—General
Section 805-740-45: Other Presentation Matters—General
805-740-45-2.A: Subsequent Accounting for Effects of Changes in a Valuation Allowance Recognized as Part of the Opening Balance Sheet of an LBO Entity
805-740-45-2.B: Subsequent Recognition of Acquired Tax Benefits
805-740-45-4.A: Accounting for the Statute of Limitations Related to an Uncertain Tax Position Expiring During the Measurement Period
Section 805-740-50: Disclosure—General
Section 805-740-55: Implementation Guidance and Illustrations—General
Topic 852, Reorganizations
Section 852-740-45: Other Presentation Matters—General
852-740-45-3.A: Quasi-Reorganizations
805-740-45-3.B: Reduction in a Valuation Allowance Existing at the Time of a Quasi-Reorganization as the Result of a Business Combination
Topic 980, Regulated Operations
Section 980-740-25: Recognition—General
980-740-25-1.A: Accounting for the Tax Effects of the Equity Component of the Allowance for Funds Used During Construction
980-740-25-2.A: Accounting for Income Tax-Related Regulatory Assets

Appendix II: Index of Accounting Literature Cited
Appendix III: Sample Footnotes and Disclosures

About the Author

Richard R. Petersen is a co-founder and Managing Director of Financial Reporting Advisors LLC (FRA). Based in Chicago, Illinois, FRA provides consulting services related to accounting and SEC reporting, and litigation support services.

Previously, Richard was a partner with Arthur Andersen LLP in its Professional Standards Group (PSG). In this role, he consulted with clients and engagement teams on complex financial reporting matters and authored interpretive guidance on topics, such as consolidations, income taxes, leases, and revenue recognition, for Andersen's worldwide practice. He also represented the firm before various standards setters, including the FASB, the SEC, and the AICPA.

Richard has served as the chair or member of various Emerging Issues Task Force working groups on a wide array of topics, such as consolidation, leases, income taxes, and revenue recognition. He also was a member of the AICPA Taskforce on Reorganization that developed AICPA Practice Bulletin No. 11, Accounting for Preconfirmation Contingencies in Fresh-Start Reporting. Richard is currently a member of the AICPA™'s Accounting Standards Executive Committee (AcSEC).

From 1988 to 1990, Richard was a Practice Fellow at the FASB. He was the project manager for the reconsideration of FASB Statement No. 96, Accounting for Income Taxes, and FASB Statement No. 101, Regulated Enterprises' Accounting for the Discontinuation of Application of FASB Statement No. 71. He also worked on issues related to business combinations and leveraged buyouts.

Richard received his Bachelor of Science in Business Administration from the University of Nebraska at Lincoln. He is a licensed Certified Public Accountant in Nebraska and Illinois and is a member of the AICPA and the Illinois CPA Society.

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