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PcfrcSpare a thought for FIN 48 and FIN 46(R). In fact, if you work for a private company, spare two thoughts.

Implementation of FASB Interpretation 48 (also known as FIN 48 or “Accounting for Uncertainty in Income Taxes”) for all non-public companies will become effective for annual financial statements for fiscal years beginning after Dec. 15, 2007 — unless the Financial Accounting Standards Board rules in favor of recommendations that would exempt private companies from the interpretations’ requirements.

A similar recommendation has been made for FIN 46(R) (a.k.a. “Consolidation of Variable Interest Entities”), which took effect for non-public companies in the first fiscal year after Dec. 15, 2004.

The Private Company Financial Reporting Committee has formally requested such exemptions, and the MACPA has written a letter to the FASB in support of the exemptions.

“Both of these interpretations will cause an undue hardship on Maryland’s privately held businesses and the CPA firms that serve them due to the inherent complexity surrounding FIN 48 and FIN 46(R), the lack of in-house tax staff resident in privately held businesses and the fact that there is insufficient time for adequate communication, preparation and education to effectively implement these complex provisions,” MACPA Executive Director Tom Hood wrote in his letter to the FASB. “Based on these reasons, we believe there would be no significant benefit to the private company users of these financial statements. We raise the question of whether the public interest of these standards is commensurate with the costs and burden of implementing them for private companies.”

That’s a pretty compelling and straightforward argument. Still, given the ticking clock,  it would be wise to prepare as if private companies will have to comply.

You’ll find more resources here:

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