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Private Company Council to Give Income Tax a Look

Private companies will soon have some better guidance when it comes to income

Income taxes are among the most onerous aspects of operating a business, but those with corporate accounting jobs will soon have clearer guidance when it comes to giving Uncle Sam his due.

According to CFO Magazine, the newly formed Private Company Council, which oversees accounting standards for non-public businesses, is set to tackle a tax guideline that has given companies grief for six years. The Financial Accounting Standards Board Interpretation No. 48, or FIN 48 for short, replaced the "best estimate" approach to private company tax positions with a set of more fixed requirements.

Although public companies have been subject to FIN 48 since 2006, the rule was deferred several times for private companies, since it was particularly difficult to adhere to for organizations that had recently merged or had multinational operations, according to CFO. Recognizing the pressing importance of tax certainty for small businesses, the PCC said recently that it would put reconsidering FIN 48 near the top of its agenda for the coming months.

Fair-value accounting, interest rate swaps and derivatives, the economic risks and rewards of consolidating variable interest entities and other topics are also on the PCC's to-do list, according to CFO.