What Can We Learn About Uncertain Tax Benefits from FIN 48?
31 Pages Posted: 3 Jun 2007
Date Written: July 3, 2007
FIN 48, Accounting for Uncertainty in Income Taxes, standardizes accounting for uncertain tax benefits and requires companies to disclose their tax reserve amounts. We summarize hand-collected disclosures related to tax reserves from 2005 through the first quarter of 2007. For the largest 100 non-financial, non-regulated firms, the reserve at adoption on January 1, 2007 is $78 billion excluding interest, or about two percent of assets. Of this $78 billion, an estimated $58 billion would affect earnings if ever released.
Keywords: FIN48, tax cushion, disclosure, FIN 48, uncertain tax benefits
JEL Classification: M41, M43, H25, H26
Suggested Citation: Suggested Citation