Tax Accounting Insights January 2010
Thomas Brown CPA P.C. Presents
Tax Accounting Insights
How the “Worker, Homeownership, and Business Assistance Act of 2009” may impact FAS 109
- New provision that permits companies to carryback certain 2008 or 2009 net operating losses (NOL) up to five years.
- Suspends the 90% limit on the utilization of alternative minimum tax (AMT) losses.
- Companies which might be affected would be those with a valuation allowance against deferred tax assets and have concluded that some or all of the deferred tax assets may not be realized. The Act increases the number of prior carryback years available and thereby potentially increases the amount of taxable income that is available to realize deferred tax assets.
- A change in carryback periods may result in a portion, or all, of the related valuation allowance no longer being necessary.
- Companies should not record the effects of these tax law changes in any earlier period, including those periods for which financial statements have not yet been issued.
- Companies will need to evaluate and recognize the effect of these tax law changes on their current and deferred taxes in the reporting period that includes November 6, 2009.
About Thomas Brown CPA P.C.
Thomas Brown CPA P.C. is a consulting firm which provides cost effective outsourced FAS 109 solutions and consolidated return preparation.
We help our clients get through the difficult task of preparing quarterly and annual FAS 109 tax provisions and allow them to have a greater focus on quarterly and year end financial statement preparation.
