MEDIA ADVISORY 10/01/09

Clarification of the effective date interaction between Topic 740 relating to accounting for uncertainty in income taxes (formerly FIN 48) and the guidance in ASU 2009-06, Income Taxes (Topic 740)—Implementation Guidance on Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Nonpublic Entities

It has come the attention of the FASB that there remain questions about the effective dates relating to Topic 740 on accounting for uncertainty in income taxes and the application guidance issued in ASU 2009-06. The following summary describes the interaction between the two standards.

ASU 2009-06 does not change the effective dates for the application of the provisions in Topic 740 relating to uncertainty in income taxes. Therefore, the deferral in paragraph 740-10-65-1 (formerly FSP FIN 48-3, Effective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises) was not changed by ASU 2009-6. The effective date for entities deferring the application of Topic 740 relating to accounting for uncertainty in income taxes is still for annual financial statements for fiscal years beginning after December 15, 2008. The purpose of ASU 2009-6 is to provide additional application guidance

For entities currently applying the requirements of Topic 740 relating to accounting for uncertainty in income taxes, the guidance in ASU 2009-06 is effective for interim and annual financial statements issued for periods ending after September 15, 2009. This effective date allows entities currently applying Topic 740 relating to accounting for uncertainty in income taxes to utilize the application guidance in the Update.

For entities that have not yet adopted Topic 740 relating to uncertainty in income taxes, the guidance in ASU 2009-06 should be applied upon adoption of Topic 740 on accounting for uncertainty in income taxes.