New tax break accounted for as deduction says FASB.Companies eligible for a tax cut for "qualified production activities" resulting from the American Jobs Creation Act of 2004 should use the benefit as a special deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. against taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. over time, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). . [ILLUSTRATION OMITTED] The tax break cuts the top tax rate for American manufacturers engaged in "qualified production activities" by 3 percentage points, to 32 percent. With the "special deduction" treatment outlined in Staff Position 109-a, companies are able to lower income subject to tax and reduce their reported income tax expenses and effective income tax rates in the periods when the benefits are taken. Another provision from the act cuts the tax rate on profits repatriated from abroad for about one year, to 5.25 percent from 35 percent. FASB also has taken a staff position (109-b) to allow companies more time to assess the effects of the repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. provision. For more, visit www.fasb.org/fasb_staff_positions/prop_fsp_fas109-a.pdf and www.fasb.org/fasb_staff_positions/prop_fsp_fas109-b.pdf. |
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