In a recent letter to the Financial Accounting Standards Board (FASB), a Financial Executives International (FEI) subcommittee argued that FIN 48, the rule on accounting for income tax uncertainty, is irrelevant to private companies, and they should be exempted from compliance requirements.
The recommendation, sent by the FEI's Standards Subcommittee of the Committee on Private Companies (CPC) earlier this month, backs a similar request made on May 30 by the private companies financial reporting committee (PCFRC), which advises FASB on adapting generally accepted accounting principles, or GAAP, for private companies.
CPC member Daryl Buck notes that because most private companies' income taxes are paid by the owner, and not by the company, "a lot of FIN 48 disclosures are really irrelevant for the decision making by the users of those financial statements."
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