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FASB considers convergence for unremitted foreign earnings

  • FASB (old) Image

29 Jul 2004

At its meeting earlier this week, the US Financial Accounting Standards Board agreed to explore the possibility of converging with IAS 12 Income Taxes by removing the existing exception to comprehensive recognition of deferred taxes for unremitted earnings of foreign subsidiaries.

Under current US GAAP, a deferred tax liability is not recognised for taxes potentially payable on profits earned and held overseas. US accounting treatment follows the tax law, which taxes overseas earnings only when received as dividends or realised through sale of the investment. Under IAS 12, however, these deferred taxes are accrued.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.