FASB releases proposal on uncertain tax positions.

In step with its effort to improve the quality of financial reporting, the Financial Accounting Standards Board has published an exposure draft of a proposed Interpretation, Accounting for Uncertain Tax Positions. The exposure draft seeks to reduce the significant diversity in practice associated with recognition and measurement in the accounting for income taxes. It would apply to all tax positions accounted for in accordance with FASB Statement No. 109, Accounting for Income Taxes. Comments are due Sept. 14 (visit www.fasb.org).

Specifically, the proposal requires that a tax position meet a "probable recognition threshold" for the benefit of the uncertain tax position to be recognized in the financial statements. This threshold is to be met assuming that the tax authorities will examine the uncertain tax position. The exposure draft contains guidance with respect to the measurement of the benefit that is recognized for an uncertain tax position, when that benefit should be derecognized, and other matters.