US GAAP ― uncertain tax positions

Produced by Tolley in association with

Corporation Tax

Guidance

This guidance note covers the aspects of ASC 740 which deals with accounting for uncertain tax positions. Previously this guidance was contained within the interpretation FIN 48.

Currently, the guidance under US GAAP is significantly more involved than under IFRS and also the level of disclosure of uncertain tax positions is far greater under US GAAP. See the IFRS Introduction guidance note for further guidance on uncertain tax positions under IFRS.

Asset rather than liability approach

When looking at uncertain tax positions, US GAAP looks at these from the perspective of tax benefits not recognised rather than liabilities provided for.

For example, suppose a filing position is taken on a tax return such that a deduction is claimed which reduces the tax payable by £100. On balance, it seems more likely that were the item examined then HMRC would prevail. The accounting analysis would be:

•
IFRS / UK GAAP ― a provision is made for £100
•
US GAAP ― there is a potential benefit of £100 which has not been recognised

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Malcolm Greenbaum

Director and Principal Trainer at Greenbaum Training and Consultancy Limited

Malcolm is a UK Chartered Accountant and Chartered Tax Advisor winning the John Wood Medal in the November 1995 CIOT sitting for the best paper on business taxation.He was previously Director of Finance and Taxation Programmes at BPP Professional Education and has delivered IFRS, US GAAP, UK Tax and VAT training (at all levels from an introduction to the complexities of IAS 39) to a multitude of organisations world-wide since 1992.Malcolm has particular experience in delivering bespoke training programmes to multi-nationals in the financial services, transport and energy sectors as well as delivering UK tax and VAT update programmes to accounting and law firms.He is passionate about training and his enthusiasm ensures that the participants enjoy the learning experience whilst gaining knowledge through their engagement in the sessions and through encouraging them to ask questions and discuss practical issues they may have.Malcolm also provides consultancy services to companies and accounting firms, including provision of VAT advice, reviewing accounting policy manuals and advising on accounting treatments of various transactions.In his spare time, Malcolm enjoys flying having gained a Private Pilot's Licence in 2014.

Popular Articles

Personal Tax

Self assessment ― amendments and corrections

Self assessment ― amendments and correctionsOnce a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the

14 Jul 2020 13:37 | Produced by Tolley Read more

Owner-Managed Businesses

Sales, advertising and marketing

Sales, advertising and marketingExpenditure on sales, advertising and marketing activities may include amounts which are disallowable for the purposes of calculating trading profits. This may be because the expenditure is:•capital in nature (see the Capital vs revenue expenditure guidance note)•not

14 Jul 2020 13:28 | Produced by Tolley Read more

Personal Tax

Gilts

Gilts‘Gilts’ are securities that are also known by a number of different names (eg gilt-edged securities, Government securities or treasury stock).The Government sells gilts to fund the deficit between public spending and tax receipts. Normally, the Government pays interest to the holder of the gilt

14 Jul 2020 11:48 | Produced by Tolley Read more

UU��ֱ��