Project Update

FIN 48—Applicability for Private Entities

Last Updated: September 25, 2009 (Updated sections are indicated with an asterisk *)

The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

Project Objective
*Due Process Documents
Decisions Reached at the Last Meeting
*Summary of Decisions Reached to Date
Next Steps
*Board/Other Public Meeting Dates and Minutes
Background Information
Contact Information

Project Objective

The objectives of this project are divided into two phases. The objective of phase one is to provide a deferral of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, for nonpublic enterprises. The objectives of phase two are to (1) provide amendments to the disclosure requirements in Interpretation 48 for nonpublic enterprises and (2) develop application guidance on Interpretation 48 for pass-through entities and not-for-profit organizations.

*Due Process Documents

Phase 1:

On December 30, 2008, the Board issued FASB Staff Position, FSP FIN 48-3, Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises. This completed phase one of the project.

Final FSP

Phase 2:

In September 2009, the Board completed this project with the issuance of Accounting Standards Update No. 2009-06, Income Taxes (Topic 740): Implementation Guidance on Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Nonpublic Entities.

Update 2009-06 

Comment Letter Summary 

Decisions Reached at the Last Meeting (July 8, 2009)

See minutes below.

*Summary of Decisions Reached to Date (As of September 24, 2009)

Phase One

See final FSP FIN 48-3.

Phase Two

See Update 2009-06.

Next Steps

None.

*Board/Other Public Meeting Dates

The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

*July 8, 2009 Board Meeting—Redeliberation of proposed FSP FIN 48-d. The Board directed the staff to proceed to a draft of the final Statement for a vote by written ballot.
December 17, 2008 Board Meeting—Redeliberation of Issues Raised in Comment Letters
October 15, 2008 Board Meeting—Applicability of Interpretation 48 for Private Entities
October 1, 2008 Board Meeting—Applicability of Interpretation 48 for Private Entities

Background Information

The Board added the project on Interpretation 48 to its agenda on September 24, 2008, in response to an agenda request received from the Private Company Financial Reporting Committee (PCFRC). The PCFRC requested an exemption from the requirements of Interpretation 48 for private entities in their unsolicited comment letter dated May 30, 2008. In lieu of such an exemption, they requested a deferral until the joint income tax convergence project is completed. The Board has since received additional comment letters supporting the agenda request from the PCFRC.

In response to these comment letters and informal discussions with other constituents, two Board members and several FASB staff members met on August 28, 2008, with a panel of users of private company financial statements to discuss whether they believed that the recognition, measurement, and disclosure requirements of Interpretation 48 were useful and cost effective. Subsequently, on September 15, 2008, the AICPA Technical Issues Committee (TIC) met with three Board members and several FASB staff members to discuss concerns about Interpretation 48 for private companies and their CPA practitioners. The discussion with TIC focused on requests for a scope exemption or deferral and on whether guidance for pass-through entities was necessary to apply the Interpretation.

Due to differences in financial statement user needs and cost-benefit considerations for private entities, the Board has decided to undertake this project to determine whether it is necessary to provide any additional amendments to Interpretation 48 for private companies.

Contact Information

Paul Glotzer
Project Manager
phglotzer@fasb.org