FASB responded to FAF’s Post-Implementation Review Report on FIN 48
20 March 2012
The FASB issued its response to the Financial Accounting Foundation's Post-Implementation Review (PIR) Report on FASB Interpretation No 48, 'Accounting for Uncertainty in Income Taxes (FIN 48)'. In its response, the FASB noted that the PIR Report findings affirm the overall effectiveness of FIN 48.
“The FASB is pleased with the PIR team’s finding that FIN 48 is resulting in more consistent and useful information for investors and other users of financial statements”, said FASB Chairman Leslie F Seidman.
“The FASB welcomes the PIR team’s recommendations to continue to improve our processes and we are taking steps to make enhancements in those areas. While the FASB does not plan to undertake a separate project to review FIN 48 at this time, the Board plans to consider the technical findings in future efforts to simplify our standards, converge them with International Financial Reporting Standards, or both”, Seidman added.
In particular, stakeholder feedback indicates that FIN 48 has resulted in more consistent recognition and measurement of uncertain tax positions and more relevant reported information about income tax uncertainties. Most preparers said that they did not incur significant implementation and compliance costs.
The FASB said that it welcomes the PIR team’s recommendations for improving the standard-setting process, including suggestions that the FASB involve investors earlier in the process, more completely describe the Board’s cost benefit analysis, and elaborate on how the Board applies its criteria for reexposing decisions reached in redeliberations.
The Board said that the criteria for a review or reconsideration of FIN 48 were not met, based on the criteria established in the FASB Rules of Procedure. However, the FASB said it will consider the PIR Report technical findings in a review of whether simplifications or modifications in US GAAP are warranted for private companies and in its analysis of the remaining differences between U.S. GAAP and International Financial Reporting Standards, in particular, IAS 12, 'Income Taxes'.
Press release
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