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Chapter 4 — Uncertainty in Income Taxes

4.4 Interest (Expense and Income) and Penalties

4.4 Interest (Expense and Income) and Penalties

ASC 740-10
30-29 Paragraph 740-10-25-56 establishes the requirements under which an entity shall accrue interest on an underpayment of income taxes. The amount of interest expense to be recognized shall be computed by applying the applicable statutory rate of interest to the difference between the tax position recognized in accordance with the requirements of this Subtopic for tax positions and the amount previously taken or expected to be taken in a tax return.
30-30 Paragraph 740-10-25-57 establishes both when an entity shall record an expense for penalties attributable to certain tax positions as well as the amount.