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Accounting Standard Codification 740 (Formerly FAS 109)

Income Tax Accounting – The Perfect Storm of Complexity

There has been an almost unprecedented rate of change in the tax laws and understanding needed to navigate the turbulent waters of income taxation.  Further, Sarbannes Oxley (Sarbox) reform and continual changes/updates under GAAP have added yet another of level of turbulence.  This has created a perfect storm of complexity in income tax accounting for financial reporting purposes (ASC 740, formerly known as “Statement 109: Accounting for Income Taxes” or ” FAS 109).

The time, resources, and level of expertise needed to comply with ASC 740 can put undue strain on any company’s accounting department.  Unless there are dedicated and highly trained tax specialists in a company, there is a real risk that tax issues will not be identified in a timely fashion.

Freed Maxick Responds to the Challenge

Over the years Freed Maxick has built a practice of highly qualified professionals that tackles head-on the complexities of ASC 740.  Our service approach is based on three cornerstones: expertise, communication, and game plan execution.

We have long recognized the technical challenges associated with ASC 740 and invest significant time and effort to maintain a level of expertise that positions us at the head of the class.

Our tax department has over 100 professionals, including 14 directors.  This allows for the depth and breadth of tax knowledge needed to provide a keen understanding of both ASC 740 and tax laws when preparing the tax provision.  We are also members in good standing with the PCAOB and the AICPA.
To learn more about the firm and our resources, read more About Us.

In addition to technical expertise we clearly understand the value of communication, which is predicated on being both proactive and collaborative.  First, we listen.  We strive to understand a company’s business, its objectives, concerns, and needs.

The communication process provides a deeper understanding of the issues and lends itself to a higher level of creativity, problem-solving and ultimately to better, more effective solutions.  The result of these efforts also allows us to identify the service parameters and approach that are most efficient for a company.

Game Plan Execution
We take a holistic approach with respect to our service.  From kickoff to conclusion we work closely with the financial team (including the outside auditors) to confirm facts and discuss issues, progress, timeframes, and milestones.

Our approach ensures that all ASC 740 considerations have been addressed and all issues properly vetted, resolved, and documented.  We take pride in preparing workpapers and supporting documentation that are intuitive and easy to follow.

ASC 740 Services
Our experience ranges from providing assurance memorandums on our review of billion dollar multinational SEC registered companies’ income tax provisions to assisting with the preparation of ASC 740 workpapers for smaller audits, and everything in-between.

Whether your company: (1) intends to outsource the provision process; (2) would like us to work hand-in-hand with your personnel to prepare the provision; or, (3) needs assistance on any ASC 740 issue, Freed Maxick can assemble the right team to best address your needs.

The following are only some of the technical ASC 740 areas that we consult on:

  • Uncertain Tax Positions
  • Intraperiod Allocation Considerations
  • Equity Based Compensation
  • Convertible Debt/Hybrid Instruments
  • Business Acquisitions/Combinations
  • Valuation Allowance Issues
  • Deferred Tax Validation
  • International Issues
  • Interim Reporting/Discreet Items
  • Outside Basis Differences
  • Reverse Mergers
  • Sarbox Compliance/Internal Controls

We may be based in New York State, however Freed Maxick provides tax services to business all over the U.S., no matter your location: Alabama, AL; Alaska, AK; Arizona, AZ; Arkansas, AR; California, CA; Colorado, CO; Connecticut, CT; Delaware, DE; Florida, FL; Georgia, GA; Hawaii, HI; Idaho, ID; Illinois; IL; Indiana, IN; Iowa, IA; Kansas, KS; Kentucky, KY; Louisiana, LA; Maine, ME; Maryland, MD; Massachusetts, MA; Michigan, MI; Minnesota, MN; Mississippi, MS; Missouri, MO; Montana, MT; Nebraska, NE; Nevada, NV; New Hampshire, NH; New Jersey, NJ; New Mexico, NM; New York; NY, North Carolina, NC; North Dakota, ND; Ohio, OH; Oklahoma, OK; Oregon, OR; Pennsylvania, PA; Rhode Island, RI; South Carolina, SC; South Dakota, SD; Tennessee, TN; Texas, TX; Utah, UT; Vermont, VT; Virginia, VA; Washington, WA; West Virginia, WV; Wisconsin, WI; Wyoming, WY. We Serve all 50 States.

CONTACT US to learn more about our Tax Services.

ABOUT US: Freed Maxick CPAs is Western and Upstate New York’s (NY) largest public accounting firm and a Top 100 firm in the U.S. Freed Maxick provides audit, tax and consulting services to closely-held businesses, public (SEC) companies, not-for-profits and governmental entities in Buffalo, Rochester, Syracuse, Albany and NYC, New York.