The pandemic has impacted almost every aspect of our lives and businesses. Income taxes is not an exception. ASC 740 deals with taxes based on income. In general, when a tax is based on income, most items that enter into pretax accounting income enter into taxable income in the same year, and vice versa. Some events, however, are recognized for book purposes and tax purposes in different years. Over time, as these differences reverse, they eventually offset each other. The tax effects of these differences, referred to as deferred taxes, should be accounted for in the intervening periods. All tax professionals that want a basic understanding of ASC 740/FAS 109 concepts and the tools to prepare basic tax provisions will benefit from this course.
This is part two in the series that focuses on these concepts. In this course we will review concepts related to how the pandemic has impacted considerations for valuation allowances, changes in tax rates, changes in entity tax status, and accounting for uncertainty in income taxes.
Publication Date: December 2020
Designed For
All tax professionals that want a basic understanding of ASC 740/FAS 109 concepts and the tools to prepare basic tax provisions will benefit from this course. Business owners and operational professionals, Accountants and Finance professionals and Internal auditors, Tax and Legal professionals.
Topics Covered
- Overview of Deferred Taxes
- Valuation Allowances and Practical Application Considerations
- Assessing Realizability of DTA and Practical Application Considerations
- Evidence to Be Considered
- Evidence — Practical Application
- Partial Valuation Allowance; Character of Income or Loss
- Tax Accounting for Financial Instruments
- COVID Implications on Financial Instruments
- Tax Accounting for Business Combinations
- Intra-Period Allocations and Practical Applications
- Application: Effects of Pretax Income from Continuing Operations with a Loss from Discontinued Operations and NOL Carryforward
- Indefinite Reinvestment Assertion
- Various COVID Impacts and Applications
Learning Objectives
- Identify ASC 740 standard for concepts of valuation allowances, changes in tax rates, entity status, uncertainty in income taxes
- Identify considerations for valuation allowances and impairments due to COVID-19
- Recognize changes in tax rates and entity tax status due to COVID 19
- Describe accounting for uncertainty in income tax due to COVID 19
- Describe modification of limitation on business interest reporting
- Recognize the impact of COVID on indefinite reinvestment consideration
- Identify the steps with respect to deferred taxes
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
Basic understanding of ASC 740.
Advance Preparation
None
Instructor
Lynn Fountain
Lynn Fountain has over 38 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Lynn has held two Chief Audit Executive (CAE) positions for international companies. In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees. The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.
Ms. Fountain is currently engaged in her own consulting and training practice. She is a highly sought-after trainer and international speaker. In addition, Ms. Fountain has assisted numerous companies with enterprise risk management frameworks, internal audit processes and financial accounting. She also serves as a discussion leader for the AICPA for numerous classes finance, accounting and risk management topics.
Ms. Fountain is the author of three separate technical books. Her first book released in 2015 by the Institute of Internal Auditors Foundation is entitled “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”. Her second book “Leading the Internal Audit Function” was released in October 2015 by Taylor & Francis Publications. This book serves as the initial launch for a series of leading practice internal audit and information technology publications. Her third book “Ethics and the Internal Auditor’s Dilemma” was released in December 2016.
Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials.