Financial Reporting Alert 07-7: FASB Decides to Defer Interpretation 48 for Nonpublic EntitiesNovember 7, 2007 |
The Financial Accounting Standards Board (the “Board”) decided today to defer the effective date of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, for nonpublic entities until years beginning after December 15, 2007. The Interpretation was originally effective for both public and nonpublic entities for fiscal years beginning after December 15, 2006. The Board will issue a proposed FASB Staff Position with a 30-day comment period on the deferral. Entities that have already issued either interim or full-year financial statements in which they adopted Interpretation 48 must continue to apply the requirements of Interpretation 48.
The Board’s decision responds to concerns raised by the Private Company Financial Reporting Committee (PCFRC) in a letter to the Board requesting deferral. The PCFRC’s recommendation was based mainly on its belief that additional guidance was needed on the implications of Interpretation 48 on pass-through entities such as S corporations and partnerships. The PCFRC also expressed concerns that, because of the timing of continuing professional education sessions, private-company preparers were only recently becoming aware of the implications of Interpretation 48. The Board agreed and deferred the effective date. However, rather than provide additional guidance on pass-through entities, the Board decided to rely on educating constituents on the applicability of the Interpretation.
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