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FASB Proposes Relief for Sufferers of FAS 96
Author(s) -
Bline Dennis M.,
Skekel Ted D.
Publication year - 1991
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970030203
Subject(s) - position (finance) , business , tax planning , accounting , finance , economics , actuarial science , tax avoidance , double taxation
FASB has reconsidered its position on accuounting for income taxes and issued an exposure draft for a proposed standard that would replace FAS 96. The proposed standard offers relief for many firms that would be unable to recognize deferred tax assets under the provisions of FAS 96. In addition, companies with positive financial outlooks will get relief from such complexities of FAS 96 as (1) scheduling every future year's reversals and deferrals individually, (2) creating hypothetical tax planning strategies to maximize each year's projected deferred tax position, and (3) considering alternative tax systems such as the AMT in developing basic tax rates for each year. Financially strong companies, in particular, should find the exposure draft an appealing alternative to FAS 96.