NEWS RELEASE 02/01/08
FASB Staff Position FIN 48-2,
Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises, Issued
Norwalk, CT, February 1, 2008—The Financial Accounting Standards Board (FASB) today issued FASB Staff Position (FSP) FIN 48-2, Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises. The final FSP incorporates changes made to the original Exposure Draft, and defers the effective date of FASB Interpretation 48, Accounting for Uncertainty in Income Taxes, for certain nonpublic enterprises-including nonpublic not-for-profit organizations-to the annual financial statements for fiscal years beginning after December 15, 2007.
When effective, Interpretation 48 should be applied as of the beginning of an enterprise's fiscal year. This deferral does not apply to nonpublic consolidated entities of public enterprises that apply U.S. generally accepted accounting principles, nor does it apply to nonpublic enterprises that issued a full set of annual financial statements using the recognition, measurement, and disclosure provisions of Interpretation 48 prior to the issuance of this FSP.
Interpretation 48 is an interpretation of FASB Statement No. 109, Accounting for Income Taxes, which increases the relevancy and comparability of financial reporting by clarifying the way companies account for uncertainty in income taxes. It makes recognition and measurement more consistent, as well as offering clear criteria for subsequently recognizing, derecognizing, and measuring such tax positions for financial statement purposes.
The deferred effective date is intended to provide eligible nonpublic enterprises with more time to apply the provisions of Interpretation 48. The Board approved the deferral based on the recommendation of the Private Company Financial Reporting Committee (PCFRC), which observed that there had been confusion among certain entities as to whether Interpretation 48 applied to them.
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Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.