Principles in Accounts Standards Codification 740

ASC 740
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ASC 740
ASC 740 stands for Accounts Standards Codification 740. It can be defined as a set of standards that provide ample guidance on how companies and other entities should go about the analysis and disclosure of risks as far as tax is concerned. Through these standards, businesses are essentially required by law to not only analyze but also disclose their tax risks. ASC 740 establishes a way through which companies their tax expenses for the purpose of reporting as per the GAAP. The GAAP refers to the generally accepted accounting principles. In addition, ASC 740 provides for standards that should be used while dealing with tax positions that are uncertain. It does so by guiding how to measure, recognize and also report such tax positions.
The principles...