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welcome to accounting with audra in this video we will continue to broaden our understanding of ase 740 by looking at uncertain tax positions in the first three videos regarding accounting for income taxes i explain how companies record income tax payable for their current year tax return liability an income tax expense for taxes that relate to book income in the current year variances in book and tax rules are also generalized using deferred tax assets and liabilities but what happens when a position taken on a tax return is subject to interpretation and it is possible that if the issue with regards to such position taken comes under audit by the irs could be challenged ase 740 requires that the income statement impact of such tax positions potentially should not be recorded in the audited financials this video will discuss two-step process required by taxpayers for recognition of an uncertain tax position and its measurement so that its impact may be recorded and reflected timely in
