FAIRLEIGH DICKINSON UNIVERSITY
TAX 8860
SELECTED STUDIES: ASC 740 (FAS 109)
Spring 2011
COURSE SYLLABUS
INSTRUCTOR: MARK CAIN
Objective: This course will provide the student with an in-depth understanding of the financial
reporting of income taxes, including both conceptual aspects and practical applications.
Overview: This course provides an in-depth analysis of the financial accounting for income taxes
under U.S. GAAP. The course begins with a conceptual framework, and then discusses such
practical applications as computing the tax provision, effective tax rate, quarterly and annual
reporting, and financial disclosures for income taxes. All major elements of ASC 740 (FAS 109)
are considered, as are related pronouncements such as (pre-codification) FIN 48, APB 28, FIN
18, and other accounting guidance. Emphasis will be given to practical application of the
accounting standards to “real-world” situations.
Required Materials:
 PwC Accounting for Income Taxes
 Current copies of relevant pronouncements (ASC 740, pre-codification FAS 109, FIN 48,
APB 28, FIN 18)
Assignments: We will cover material in chapters 1 through 7, 10 through 12, and 14 through 19
of the PwC text. Also, there will be reading assignments covering the relevant pronouncements.
Additional reading materials will be provided as handouts. We will also have assignments that
will require in-class review and/or read-outs.
Class Participation: In class we will cover the assigned materials and discuss practical
applications. Accordingly, it is expected that you will be familiar with all of the material assigned
in the text and financial pronouncements and be prepared to discuss them in class. I anticipate
that you will be prepared and will participate fully in class discussions. Class participation will be
an important part of the final grade.
Class meetings: Classes will meet on Thursday evenings from 6:00 to 9:10 in NAB 205
beginning on April 21.
Attendance: Attendance is important due to the interactive nature of the course. More than 2
absences will be considered in the final grade.
Grading: Your grade will be based on an in-class Mid Term exam covering the first half of the
course and a cumulative Final exam covering the entire course, with emphasis on the second half
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of the semester. The mid-term will count 25%, the final 50% and class participation (including
assignments & read-outs) 25%.
Office Hours: I am available before and after class by appointment as well as by phone at
(973)-937-0220 or e-mail at mark.cain@globalcrossing.com.
GOALS:
Gain a conceptual understanding of ASC 740 (FAS 109), “Accounting for Income Taxes”
Understand key tax accounting outputs – tax provision, ETR, tax disclosures, etc.
Gain an appreciation for the challenges in application of tax accounting rules
Explore special problems and challenges in the income tax accounting area, including
international taxation, business combinations, etc.
5) Gain an understanding of accounting pronouncements related to FAS 109, including (precodification) FIN 48, APB 28, FIN 18, and others
6) Develop confidence in tax accounting matters, including communicating complex
accounting matters to non-tax professionals
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MATERIAL TO BE COVERED
Apr. 21: Introduction & Course Overview
 Administrative Matters
 Objectives of the Course
 General Concepts
 Scope of FAS 109
Conceptual Framework
 Objectives of ASC 740 (FAS 109)
 Basic Principles
 Terminology
 Balance Sheet Approach
Reading Assignment:
 PwC: Chapters 1 & 2
 FAS 109: Paragraphs 1 – 9
Apr. 28: Conceptual Framework (con’t)
Temporary Differences
 Definition and Examples
 Permanent Differences
 Deferred Tax Assets and Liabilities
Reading Assignment:
 PwC: Chapters 3 & 4
 FAS 109: Paragraphs 10 – 19
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May 5:
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Valuation Allowance
Negative and Positive Evidence
Tax Planning, Strategies
Scheduling
Changes in the Valuation Allowance
Reading Assignment:
 PwC: Chapters 5 & 6
 FAS 109: Paragraphs 17 - 26
May 12: Computing the Tax Provision
 Current, Deferred, and Total Tax Provision
 Tax Return to Accrual “True-Up”
Reading Assignment:
 PwC: Chapter 7
 FAS 109: Paragraph 27
May 19: Interim Periods Income Taxes
 APB 28
 Annual Effective Tax Rate
 FIN 18
Reading Assignment:
 PwC: Chapter 17
 APB 28, FIN 18 (including Appendix A, B &C)
Accounting for Uncertainty in Income Taxes
 Objective and Scope of FIN 48
 Recognition of Tax Benefit
 Measurement of Tax Benefit
Reading Assignment:
 PwC: Chapter 16
 FIN 48: Paragraphs 1 – 24
 FAS 5
May 26: Accounting for Uncertainty in Income Taxes (con’t) & Review for Midterm Exam
Jun. 2: MIDTERM EXAM
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Jun. 9:
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Financial Statement Disclosures
Balance Sheet Preparation
Income Statement Presentation
Footnote Disclosures
MD & A Disclosures
FIN 48 Disclosure Requirements
Interim Disclosure
Reading Assignment:
 PwC: Chapter 15, 14
 FAS 109: Paragraphs 40 – 49
Jun. 16: Financial Statement Disclosures (con’t)
 In-class Disclosure Assignment Read-outs
Jun. 23: Special Problems: International Tax Reporting, Business Combinations, FAS
123R, and Intraperiod Tax Allocation
 Global Effective Tax Rate
 Accounting for Book / Tax Difference in Basis of Investments
 Indefinite Reversal Criterion (APB 23 Exception)
Reading Assignment:
 PwC: Chapter 11
 APB 23
 PwC: Chapters 10, 12, 18
Jun. 30: Special Problems (con’t): What’s Next?
 IFRS (IAS12) and IFRS / US GAAP Convergence
 Review for Final Exam
Reading Assignment
 PwC: Chapter 19
Jul. 7: FINAL EXAM
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