POST IMPLEMENTATION REVIEW CONCLUDES INCOME TAX STANDARD GENERALLY ACHIEVES ITS PURPOSE

Norwalk, CT, November 19, 2013—A 1992 accounting standard addressing the accounting for income taxes generally achieves its purpose. That was the central conclusion of the post-implementation review (PIR) of Financial Accounting Standards Board (FASB) Statement No. 109, Accounting for Income Taxes.

Statement 109 requires companies to recognize the estimated amount of taxes payable or refundable for the current year. It also requires companies to recognize deferred tax liabilities and assets for future tax consequences of events that have been recognized in a company´s financial statements or tax returns. Statement 109 applies to public and private companies.

FAF President and CEO Teresa S. Polley said: "On behalf of the FAF and the FASB, I´d like to thank the stakeholders who helped the PIR team assess the application, usefulness, and effectiveness of the income tax standard for public and private companies."

FASB Chairman Russell G. Golden said: "The post-implementation review report on Statement 109 identified many positive aspects of the income tax standard, including its decision-usefulness to users and understandability for preparers. Stakeholders have indicated that income tax accounting remains complex, and we are eager to consider the PIR team´s findings. We anticipate providing our initial response in the coming weeks."

The PIR team received input from investors and other financial statement users, as well as from preparers, auditors, and academics. Based on its research the review team concluded: The PIR team had no significant standard-setting process recommendations as a result of the review.

The review of Statement 109 was undertaken by an independent team of the Financial Accounting Foundation (FAF), the parent organization of the FASB and the Governmental Accounting Standards Board (GASB). The team´s formal report is available here.

Update on Other PIR Activities

With the completion of the FAS 109 review, the PIR team has begun their review of FASB Statement No. 123(R), Share-Based Payment.

The FAF also announced today that the PIR team will begin a review of FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements, after completing their review of FASB Statement No. 157, Fair Value Measurements, early next year.

The PIR team will also initiate a review of GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions, and related GASB Statement No. 36, Recipient Reporting for Certain Shared Nonexchange Revenues, after completing their review of GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, next year.

Stakeholders who would like the opportunity to participate in upcoming PIR surveys, conducted by an independent survey firm on behalf of the Financial Accounting Foundation, should register online.

For more information on the PIR process, visit the FAF website.


About the Financial Accounting Foundation

The FAF is responsible for the oversight, administration, and finances of both the Financial Accounting Standards Board (FASB) and its counterpart for state and local government, the Governmental Accounting Standards Board (GASB). The Foundation is also responsible for selecting the members of both Boards and their respective Advisory Councils.

About the Financial Accounting Standards Board

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 http://www.fasb.org/.