: The financial statements
subject to the engagement performed in accordance with SSARSs are those of the entity The preparation and fair presentation of such financial statements
requires identification of the applicable framework.
The SEC requires that companies' management design an internal control system that can substantiate every assertion in their financial statements
. To do that, management has to analyze the company's system of internal control over financial reporting and provide evidence sufficient to support its conclusions.
Such a level of confidence "should be sufficient for recognition of the benefit in the financial statements
because that amount would represent the enterprise's best estimate of what it believes the tax outcome will ultimately be."
C treats each transaction as a sale for financial statement
purposes, but as a lease for Federal tax purposes.
For example, in the first scenario discussed above, if the accounting firm knew that the financial statements
were to be used to obtain a bank loan, then the accounting firm would be liable to any bank that they specifically knew would rely on the financial statements
or could be expected to rely on the financial statements
Thus, evidence suggests that information contained in financial statements
remains unexploited by investors.
It also recommends implementing these provisions earlier where financial statements
have not yet been issued or when other interim financial statements
One type of user could read financial statements
to evaluate business risks and profitability in order to determine a company's viability.
The proposed Interpretation would permit an enterprise to "recognize the financial statement
effects of a tax position when that position is probable of being sustained on audit by the taxing authorities based solely on the technical merits of the position." (13) The proposed Interpretation explains that "the term 'probable' is used in the sense of paragraph 3(a) of FAS 5 to mean that 'the future event or events are likely to occur.'" Moreover, the proposed Interpretation would apply to all tax positions, not just "uncertain" tax positions.
965(c)(1) term "applicable financial statements
," which comes into play when computing the deduction's upper limit.
Net obligations would be liabilities (or assets) in the government-wide financial statements
and in the proprietary or fiduciary funds financial statements
State whether it has an applicable financial statement
and, if so, identify the type;