• 10 Aug 2009

Reviewing Your Intercompany Pricing Policies Under Fin 48

The Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109 (FIN 48) to clarify the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.1 Transfer pricing affects the allocation of taxable income between the seller affiliate and the buying affiliate for any intercompany transaction. If the effective tax rates between these two entities differ, then uncertainty as to what will be accepted by the national income tax authorities as arm’s-length pricing will generate uncertainty as to the worldwide income tax provision even if double taxation is avoided. Learn more