Two technical committees from Financial Executives International have sent a letter making suggestions to the Financial Accounting Standards Board's proposed interpretation, "Accounting for Uncertain Tax Positions."
Sent from FEI's technical committees on corporate reporting and taxation, the Sept. 9 letter makes the case that the proposed interpretation would fail to eliminate the diversity of practice that currently exists for the accounting of uncertain tax positions. The committees suggest an "impairment approach," similar to that used in accounting for contingencies.
If FASB were to keep the "asset approach," the committees asked the board to consider whether the proposed threshold for recognizing the benefits of uncertain tax positions is too restrictive. Also, the committees listed a number of reasons why implementation before the end of 2005 would be unrealistic, and suggested that any change be deferred until the end of fiscal years ending after Dec. 15, 2006. FEI is an international organization of 15,000 members, including chief financial officers, controllers, treasurers, tax executives and other senior financial executives. The complete FASB exposure draft can be accessed at www.fasb.org/draft/ed_prop_interp_utp.pdf.
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