Accounting for Income Taxes (ASC 740)
“If you can’t explain it simply, you don’t understand it well enough”–Albert Einstein
Accounting for Income Tax, Tax Provision, Tax Accounting, ASC 740, FAS 109, FIN 48, etc.
Whatever you call it, it’s not rocket science.
It does not need to be so complicated.
At KBF, We Make It Simple.
Why is Accounting for Income Tax (ASC 740) so difficult?
Accounting for Income Tax (known as ASC 740) is one of the most challenging areas related to financial reporting. It’s typically one of the top reasons for internal control deficiencies and financial statement restatements. What’s more, it’s not a core competency of most finance professionals and many tax professionals.
Accounting for Income Tax requires a broad understanding of all worldwide income tax matters facing a company. It requires gathering, interpreting, managing, and validating enormous amounts of data in a short period of time. It requires knowledge of complex and ever-changing income tax laws and accounting rules and knowing when to apply them. It necessitates an understanding of the risks and uncertainty associated with income tax filing positions. It calls for creating a nimble, intuitive review format that both the finance team and the audit firm can understand….. and the deadlines are tight.
In short, there is a lot that can go wrong.
Why Choose KBF?
Accounting for Income Tax is what we do, every day.
By the numbers…
- The 60+ CPAs on the KBF Corporate Tax Services team are known as the Accounting for Income Tax (ASC 740) experts. The team is focused 100% on income tax provision assistance. KBF serves more than 400 companies in this capacity; including more than 150 publicly traded companies as well as many private equity or venture-backed companies.
- 100% of the KBF Corporate Tax Service Team’s clients are audited by another accounting firm (primarily Big 4).
- KBF has 100s of clients in common with the Big 4 audit firms – and they are our biggest referral source.
Our team’s training and expertise are second to none – because the audit firms immediately review our work, our team must be as good or better than that of the top audit firms.
The KBF work product is best in class; it is easy to understand, audit, and review. Our team has spent years developing and perfecting processes, procedures, and templates to simply, quickly, and efficiently boil the income tax analysis down to the basics – debits and credits and disclosures. Our work product is designed to be nimble, to easily and quickly update as pretax income is determined. Our work product has many checks and balances built in to ensure data validation and mechanical integrity. It is self-contained and well referenced so the data source can be quickly validated and reviewed, and financial statement journal entries and footnote disclosures are linked to the underlying support.
KBF takes the burden of the income tax accounting off the finance team and is able to explain (in plain English and presented in a crisp, easy-to-review work product) what the finance team needs to know as it relates to the income tax accounting and disclosures.
Due to our significant and diverse client base, we work closely with all the top audit firms on a quarterly basis. As a result, KBF is on the cutting edge of emerging issues and best practices, and, in fact, KBF operates as a clearinghouse of such matters.
The experts at KBF make ASC 740 simple.