FASB Issues Staff Position on Financial Interpretation 48

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February 21, 2008

A FASB Staff Position (FSP) issued on February 1 defers the effective date of FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes, for certain nonpublic enterprises. Few independent institutions are likely to qualify for this deferral.

The one-year deferral of the effective date of Interpretation 48 is for all nonpublic entities, unless they have already implemented the Interpretation and issued interim or year-end GAAP financial statements. Consistent with the definition of public in FASB Statement No. 109, Accounting for Income Taxes, which Interpretation 48 is interpreting and which is amended by FSP FAS 126-1, nonpublic would include all not-for-profits without publicly traded conduit debt.

Publicly traded conduit debt securities can be traded in foreign or domestic exchanges or over-the-counter markets, which can be local or regional. Based on this definition, many independent institutions hold such conduit debt and would be considered public per SFAS 109 and therefore FIN 48. However, independent institutions without conduit debt or with only privately placed conduit debt would be eligible for the deferral.

NACUBO Contact: Sue Menditto, Director, Accounting Policy