Financial Accounting Standards Board

FINANCIAL ACCOUNTING STANDARDS BOARD Statement 109 This Statement establishes monetary yarding and reporting standards for the effects of income revenue enhancement incomees that result from an enterprises activities during the current and preceding years. It requires an asset and liability approach for monetary accounting and reporting for incomes taxes. This Statement supersedes FASB Statement No. 96, patsy for Income Taxes, and amends or supersedes other accounting pronouncements listed in addendum D. (www.fasb.org) ? FINANCIAL ACCOUNTING STANDARDS BOARD Statement 109 The reason FASB 109 was commit was because SFAS 96 and APBO 11 were confusing and time consuming. They apply the deferred rule of accounting, thus the recognition and measurement of deferred income tax liabilities and assets were found on the income direction approach. APBO 11 which was issued in 1967 required the deferral method of accounting for income taxes. Deferred incom e tax liabilities and assets atomic number 18 based on the income statement approach. This process ca utilize deferred taxes to be removed from the deferred tax credit account at a rate that was ofttimes different from the rate that was originally recorded. The process was meaningless and was viewed as just a mechanical process.

The major purpose of SFAS96 was to pull in the balance stable gear accounts for deferred taxes more meaningful in keeping with the FASBs conceptual framework. www.nysscpa.org The liability method was used to recognize and measure deferred tax liabilities and assets. The same appro ach is used in SFAS 109 where income tax ge! t down is the result of several(prenominal) computations. Two major problems with SFAS 96 are the resulting complexity and discombobulation of the recognition and measurement of deferred tax assets and the required computer computer programming to determine the reversal of temporary differences. It is now believed that the scheduling onus has been reduced by the procedures that are now required. SFAS 96 as well would not allow...If you want to get a serious essay, ball club it on our website: OrderCustomPaper.com

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