Publication Year



Accounting, income taxes, history of accounting, SFAS No. 96, SFAS No. 109


Accounting | Business | Economics | Taxation


This paper explores the history of accounting for income taxes from APBO No. 11 to SFAS No. 96 and finally to SFAS No. 109. As the FASB tries to bring coherence to the financial reporting principles, accounting for income taxes is constantly being re-evaluated. After Opinion No. 11 was passed in 1967, multiple board members and users saw problems with it., especially over time when the conceptual framework was developed. After the development of the Financial Accounting Concepts Statements, a different approach to accounting for income taxes was needed. In 1987, SFAS No. 96 was contemplated. However, because of the multiple problems with this Statement the effective date was constantly being delayed. The Financial Accounting Standards Board decided that instead of delaying the effective date of the statement more, they would readdress the issue of accounting for income taxes. Before the FASB will issue a new standard they will go through a long process of reviewing the issue. The FASB will issue a new standard they will go through a long process of reviewing the issue. The FASB will set up a subcommittee to address a certain issue then the FASB will release a discussion memorandum for the public to respond to. The FASB will look at the concerns brought up by the public and then issue an exposure draft. The FASB will once again address the public's concerns and either draft a statement or consider the issue for a longer period of time. Just because the FASB has agreed on a statement does not mean that it will become effective. Using the example of SFAS No. 96, the FASB was never completely satisfied with the statement so it never became effective. After this lengthy due process, in 1192 Statement No. 109 was passed. This statement became effective for fiscal years beginning after December 15, 1992. Also included is a look at International Standards and how they compare to US GAAP standards. In some areas they are the same while in other areas they are different.

Department 1 Awarding Honors Status