Accounting Standard Codification 740 (ASC 740)
Income Tax Accounting
There has been an almost unprecedented rate of change in the tax laws and understanding needed to navigate the complexity of income taxation. Further, Sarbanes-Oxley (SOX) reform and continual changes and updates under Generally Accepted Accounting Principles (GAAP) have created additional challenges in income tax accounting for financial reporting purposes
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.
Our service approach is based on three cornerstones: expertise, communication, and execution.
Freed Maxick has long recognized the technical challenges associated with ASC 740 and invests significant time and effort to maintain a level of expertise that positions us ahead of the curve.
In addition to technical expertise we clearly understand the value of communication, which is predicated on being both proactive and collaborative.
We take a holistic approach to our service. We work closely, from start to finish, with the financial team (including the outside auditors) to confirm facts and discuss issues, progress, timeframes, and milestones.
Freed Maxick’s approach ensures that all ASC 740 considerations have been addressed and all issues properly vetted, resolved, and documented. We take pride in preparing work papers and supporting documentation that are intuitive and easy to follow.
The following are 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
- SOX Compliance/Internal Controls