{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/270/740/#35-subsequent-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"270","topic_title":"Interim Reporting","subtopic":"270-740","subtopic_title":"Income Taxes","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"270-740-35-1","para":"35-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This guidance addresses the accounting for interim period <a href=\"/glossary/i/#income-tax-expense-or-benefit\" class=\"term\" title=\"The sum of current tax expense (or benefit) and deferred tax expense (or benefit).\"><span>income tax expense (or benefit)</span></a> in periods subsequent to an entity's first interim period within a fiscal year. See Section <a altsource=\"GUID-83667A67-401B-4696-B597-8735B1E89794.ditamap\" class=\"ditamap\">740-270-30</a> for a description of and requirements related to the determination of the estimated annual effective tax rate.</div> </div>","snippet":"This guidance addresses the accounting for interim period income tax expense (or benefit) in periods subsequent to an entity's first interim period within a fiscal year. See Section 740-270-30 for a description of and re…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3ee687a1b0dc4e7ec44595b1a62c575448c5e6e8cc1817764504141d24e2ff97","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}},{"citation":"270-740-35-2","para":"35-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_10425063-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The estimated annual effective tax rate is described in paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/270/740/#270-740-30-6\" class=\"xref\">740-270-30-6 through 30-8</a></div>. As indicated in paragraph <a href=\"/asc/270/740/#270-740-30-18\" class=\"xref\">740-270-30-18</a>, estimates of the annual effective tax rate at the end of interim periods are, of necessity, based on evaluations of possible future events and transactions and may be subject to subsequent refinement or revision. If a reliable estimate cannot be made, the actual effective tax rate for the year to date may be the best estimate of the annual effective tax rate. </span></span> </div> </div>","snippet":"The estimated annual effective tax rate is described in paragraphs 740-270-30-6 through 30-8. As indicated in paragraph 740-270-30-18, estimates of the annual effective tax rate at the end of interim periods are, of nece…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:771e5411fbd99c7826d58f4e780e00c7ed85edcb81a1de285e9692aba76a7d53","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}},{"citation":"270-740-35-3","para":"35-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_10425228-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">As indicated in paragraph <a href=\"/asc/270/740/#270-740-30-6\" class=\"xref\">740-270-30-6</a>, at the end of each successive interim period the entity shall make its best estimate of the effective tax rate expected to be applicable for the full fiscal year. </span></span> <span class=\"sfragment\" id=\"sfr_10425370-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">As indicated in paragraph <a href=\"/asc/270/740/#270-740-30-8\" class=\"xref\">740-270-30-8</a>, the rate so determined shall be used in providing for <a href=\"/glossary/i/#income-taxes\" class=\"term\" title=\"Domestic and foreign federal (national), state, and local (including franchise) taxes based on income.\"><span>income taxes</span></a> on a current year-to-date basis. </span></span> <span class=\"sfragment\" id=\"sfr_10425482-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The rate shall be revised, if necessary, as of the end of each successive interim period during the fiscal year to the entity's best current estimate of its annual effective tax rate. </span></span> </div> </div>","snippet":"As indicated in paragraph 740-270-30-6, at the end of each successive interim period the entity shall make its best estimate of the effective tax rate expected to be applicable for the full fiscal year. As indicated in p…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2389069669ce4a083f849960db38b065604872f95db6dab9f49d15b83bf9e58a","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}},{"citation":"270-740-35-4","para":"35-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_1042557D-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">As indicated in paragraph <a href=\"/asc/270/740/#270-740-30-5\" class=\"xref\">740-270-30-5</a>, the estimated annual effective tax rate shall be applied to the year-to-date <a href=\"/glossary/o/#ordinary-income-or-loss\" class=\"term\" title=\"Ordinary income (or loss) refers to income (or loss) from continuing operations before income taxes (or benefits) excluding significant unusual or infrequently occurring items. Discontinued operations and cumulative effects of changes in accounting principles are also excluded from this term. The term is not used in the income tax context of ordinary income versus capital gain. The meaning of unusual or infrequently occurring items is consistent with their use in the definitions of the terms unusual nature and infrequency of occurrence.\"><span>ordinary income (or loss)</span></a> at the end of each interim period to compute the year-to-date <a href=\"/glossary/t/#tax-or-benefit\" class=\"term\" title=\"Tax (or benefit) is the total income tax expense (or benefit), including the provision (or benefit) for income taxes both currently payable and deferred.\"><span>tax (or benefit)</span></a> applicable to ordinary income (or loss). </span></span> <span class=\"sfragment\" id=\"sfr_10425722-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The interim period tax (or benefit) related to ordinary income (or loss) shall be the difference between the amount so computed and the amounts reported for previous interim periods of the fiscal year. </span></span> </div> </div>","snippet":"As indicated in paragraph 740-270-30-5, the estimated annual effective tax rate shall be applied to the year-to-date ordinary income (or loss) at the end of each interim period to compute the year-to-date tax (or benefit…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1d680863c76964423f136b6a9b73f63692c10d35ff317c5c752127e32263dff4","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}},{"citation":"270-740-35-5","para":"35-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_10425814-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">One result of the year-to-date computation is that, if the tax benefit of an ordinary loss that occurs in the early portions of the fiscal year is not recognized because it is more likely than not that the tax benefit will not be realized, tax is not provided for subsequent ordinary income until the <a href=\"/glossary/u/#unrecognized-tax-benefit\" class=\"term\" title=\"The difference between a tax position taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to Subtopic 740-10.\"><span>unrecognized tax benefit</span></a> of the earlier ordinary loss is offset (see paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/270/740/#270-740-25-9\" class=\"xref\">740-270-25-9 through 25-11</a></div>). </span></span> <span class=\"sfragment\" id=\"sfr_10425908-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">As indicated in paragraph <a href=\"/asc/270/740/#270-740-30-31\" class=\"xref\">740-270-30-31</a>, the limitations described in paragraph <a href=\"/asc/270/740/#270-740-25-9\" class=\"xref\">740-270-25-9</a> shall be applied in determining the estimated tax benefit of an ordinary loss for the fiscal year, used to determine the estimated annual effective tax rate, and the year-to-date tax benefit of a loss. </span></span> <span class=\"sfragment\" id=\"sfr_10425A26-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">As indicated in paragraph <a href=\"/asc/270/740/#270-740-30-33\" class=\"xref\">740-270-30-33</a>, if the tax benefit relates to an estimated ordinary loss for the fiscal year, it shall be considered in determining the estimated annual effective tax rate described in paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/270/740/#270-740-30-6\" class=\"xref\">740-270-30-6 through 30-8</a></div>. If the tax benefit relates to a year-to-date ordinary loss, it shall be considered in computing the maximum tax benefit that shall be recognized for the year to date. </span></span> </div> </div>","snippet":"One result of the year-to-date computation is that, if the tax benefit of an ordinary loss that occurs in the early portions of the fiscal year is not recognized because it is more likely than not that the tax benefit wi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9fed81237aad430184d09c7a8926264291b664260ec36d807939571b5116555","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}},{"citation":"270-740-35-6","para":"35-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"> <span class=\"sfragment\" id=\"sfr_10425B27-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">A change in judgment that results in subsequent recognition, derecognition, or change in measurement of a <a href=\"/glossary/t/#tax-position\" class=\"term\" title=\"A position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. A tax position can result in a permanent reduction of income taxes payable, a deferral of income taxes otherwise currently payable to future years, or a change in the expected realizability of deferred tax assets. The term tax position also encompasses, but is not limited to: A decision not to file a tax return An allocation or a shift of income between jurisdictions The characterization of income or a decision to exclude reporting taxable income in a tax return A decision to classify a transaction, entity, or other position in a tax return as tax exempt An entity's status, including its status as a pass-through entity or a tax-exempt not-for-profit entity.\"><span>tax position</span></a> taken in a prior interim period within the same fiscal year is an integral part of an annual period and, consequently, shall be reflected as such under the requirements of this Subtopic. </span></span>This requirement differs from the requirement in paragraph <a href=\"/asc/740/10/#740-10-25-15\" class=\"xref\">740-10-25-15</a> applicable to a change in judgment that results in subsequent recognition, derecognition, or a change in measurement of a tax position taken in a prior annual period, which requires that the change (including any related interest and penalties) be recognized as a discrete item in the period in which the change occurs.</div> </div>","snippet":"A change in judgment that results in subsequent recognition, derecognition, or change in measurement of a tax position taken in a prior interim period within the same fiscal year is an integral part of an annual period a…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:46c412ea9a439b7c51135ee3d44579c954551ff25c18b5ebeb59918e3e639e25","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}},{"citation":"270-740-35-7","para":"35-7","html":"<div class=\"asc-body\"><div class=\"norm-text\">See Example 1, Case C (paragraph <a href=\"/asc/270/740/#270-740-55-9\" class=\"xref\">740-270-55-9</a>) for an illustration of how changes in estimates impact quarterly income tax computations.</div> </div>","snippet":"See Example 1, Case C (paragraph 740-270-55-9) for an illustration of how changes in estimates impact quarterly income tax computations.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:84c1ea43d4e987b6190565d18119b4397e0fd1d92b8a8cc66172566643cf9505","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:52995ab967ea18e9e635d2a5baa84df20d4f2b4346912388c705cbd4adf4bfd6","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:024ceefa0e6e88008d1004a6f82b118c5ba705f9fb76afe8d740b82a73ced628","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:024ceefa0e6e88008d1004a6f82b118c5ba705f9fb76afe8d740b82a73ced628","downloaded_from":"2026-09-09T23:20:37.242Z","last_downloaded_at":"2026-09-09T23:20:37.242Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479218","source_sha256":"b7c944181b7c24b1a45ad21c8664015e155f2bfa8206e21f30f26c04d4e59a4e"}}