{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/270/740/#55-implementation-guidance-and-illustrations","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":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"270-740-55-1","para":"55-1","html":"
This Section, which is an integral part of the requirements of this Subtopic, provides Examples of applying the required accounting for interim period income taxes to some specific situations. In general, the Examples illustrate matters unique to accounting for income taxes at interim dates. The Examples do not include consideration of the nature of tax credits and events that do not have tax consequences or illustrate all possible combinations of circumstances.
","snippet":"This Section, which is an integral part of the requirements of this Subtopic, provides Examples of applying the required accounting for interim period income taxes to some specific situations. In general, the Examples il…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:26ba579cd8e276773b645f6cf1ffb5b4ecf1772245bbf84acf3e22605b7640ea","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:369e54e1a34873bb7060216a14ced3dc9a5dd4e0837b4c897078e81a07b7893f","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"270-740-55-2","para":"55-2","html":"
The following Cases illustrate the guidance in Sections 740-270-30 and 740-270-35 for accounting for income taxes applicable to ordinary income (or loss) at an interim date if ordinary income is anticipated for the fiscal year:
  1. a
    Ordinary income in all interim periods (Case A)
  2. b
    Ordinary income and losses in interim periods (Case B)
  3. c
    Changes in estimates (Case C).
","snippet":"The following Cases illustrate the guidance in Sections 740-270-30 and 740-270-35 for accounting for income taxes applicable to ordinary income (or loss) at an interim date if ordinary income is anticipated for the fisca…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0b7863c72984e82defade13eed289eba5bae0934a313ad117aa4fdbae07a9dc5","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-3","para":"55-3","html":"
Cases A and B share all of the following assumptions:
  1. a
    For the full fiscal year, an entity anticipates ordinary income of $100,000. All income is taxable in one jurisdiction at a 50 percent rate. Anticipated tax credits for the fiscal year total $10,000. No events that do not have tax consequences are anticipated. No changes in estimated ordinary income, tax rates, or tax credits occur during the year.
  2. b
    Computation of the estimated annual effective tax rate applicable to ordinary income is as follows.
    • \"Tax at statutory rate ($100,000 at 50%)\" \" $50,000 \" Less anticipated tax credits \" (10,000)\" Net tax to be provided \" $40,000 \" \"Estimated annual effective tax rate ($40,000 ÷ $100,000)\" 40%
  3. c
    Tax credits are generally subject to limitations, usually based on the amount of tax payable before the credits. In computing the estimated annual effective tax rate, anticipated tax credits are limited to the amounts that are expected to be realized or are expected to be recognizable at the end of the current year in accordance with the provisions of Subtopic 740-10. If an entity is unable to estimate the amount of its tax credits for the year, see paragraphs
    740-270-30-17 through 30-18
    .
","snippet":"Cases A and B share all of the following assumptions:\n(a) For the full fiscal year, an entity anticipates ordinary income of $100,000. All income is taxable in one jurisdiction at a 50 percent rate. Anticipated tax credi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:09dc21ee49cabab29893d59fb3a0c1df65ffdc31f963ce23bbb16928799c5ccc","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-4","para":"55-4","html":"
The entity has ordinary income in all interim periods. Quarterly tax computations are as follows.
","snippet":"The entity has ordinary income in all interim periods. Quarterly tax computations are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c2503fb65f4feb11c3b42a331138ed2f3f00a171eac89502ab444118871a6dba","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-5","para":"55-5","html":"
The following Cases illustrate ordinary income and losses in interim periods:
  1. a
    Year-to-date ordinary income (Case B1)
  2. b
    Year-to-date ordinary losses, realization more likely than not (Case B2)
  3. c
    Year-to-date ordinary losses, realization not more likely than not (Case B3).
","snippet":"The following Cases illustrate ordinary income and losses in interim periods:\n(a) Year-to-date ordinary income (Case B1)\n(b) Year-to-date ordinary losses, realization more likely than not (Case B2)\n(c) Year-to-date ordin…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:55752622078799ed5cdadf0a4c04bd31a37b14d0e70b311868581dbfdc446884","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-6","para":"55-6","html":"
The entity has ordinary income and losses in interim periods; there is not an ordinary loss for the fiscal year to date at the end of any interim period. Quarterly tax computations are as follows.
","snippet":"The entity has ordinary income and losses in interim periods; there is not an ordinary loss for the fiscal year to date at the end of any interim period. Quarterly tax computations are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a6741a11b9ce2aaa240b4144cd8c5b3289a751b4fc44e4380206aa8ecfe76ef9","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-7","para":"55-7","html":"
The entity has ordinary income and losses in interim periods, and there is an ordinary loss for the year to date at the end of an interim period. Established seasonal patterns provide evidence that realization in the current year of the tax benefit of the year-to-date loss and of anticipated tax credits is more likely than not. Quarterly tax computations are as follows.
","snippet":"The entity has ordinary income and losses in interim periods, and there is an ordinary loss for the year to date at the end of an interim period. Established seasonal patterns provide evidence that realization in the cur…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9cce92f2e8b578fc988dfcd27c34190b26e198482f0e8e9b2ced6271c5946fe8","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-8","para":"55-8","html":"
The entity has ordinary income and losses in interim periods, and there is a year-to-date ordinary loss during the year. There is no established seasonal pattern and it is more likely than not that the tax benefit of the year-to-date loss and the anticipated tax credits will not be realized in the current or future years. Quarterly tax computations are as follows.
","snippet":"The entity has ordinary income and losses in interim periods, and there is a year-to-date ordinary loss during the year. There is no established seasonal pattern and it is more likely than not that the tax benefit of the…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b24220303df18a958b578794ae7329d4810f1d2646e1d1dac3596922d2db9387","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-9","para":"55-9","html":"
During the fiscal year, all of an entity's operations are taxable in one jurisdiction at a 50 percent rate. No events that do not have tax consequences are anticipated. Estimates of ordinary income for the year and of anticipated credits at the end of each interim period are as shown below. Changes in the estimated annual effective tax rate result from changes in the ratio of anticipated tax credits to tax computed at the statutory rate. Changes consist of an unanticipated strike that reduced income in the second quarter, an increase in the capital budget resulting in an increase in anticipated investment tax credit in the third quarter, and better than anticipated sales and income in the fourth quarter. The entity has ordinary income in all interim periods. Computations of the estimated annual effective tax rate based on the estimate made at the end of each quarter are as follows.
","snippet":"During the fiscal year, all of an entity's operations are taxable in one jurisdiction at a 50 percent rate. No events that do not have tax consequences are anticipated. Estimates of ordinary income for the year and of an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7e1afa743729b3ff0b7ca9295c208a06ce6df24bbece194525181005e6e4fbb6","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-10","para":"55-10","html":"
Quarterly tax computations are as follows.
","snippet":"Quarterly tax computations are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:21decc2542f0144395669e038afd33401a34725c39f45d855b1eddccd7eb09b9","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-11","para":"55-11","html":"
The following Cases illustrate the guidance in Section 740-270-30 for accounting for income taxes applicable to ordinary income (or loss) at an interim date if an ordinary loss is anticipated for the fiscal year:
  1. a
    Realization of the tax benefit of the loss is more likely than not (Case A)
  2. b
    Realization of the tax benefit of the loss is not more likely than not (Case B)
  3. c
    Partial realization of the tax benefit of the loss is more likely than not (Case C)
  4. d
    Reversal of net deferred tax credits (Case D).
","snippet":"The following Cases illustrate the guidance in Section 740-270-30 for accounting for income taxes applicable to ordinary income (or loss) at an interim date if an ordinary loss is anticipated for the fiscal year:\n(a) Rea…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c5d48e8855c7d08f34eae0b5ca9ab7c104e562454122f4c1da97157993315c43","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-12","para":"55-12","html":"
Cases A, B, and C share the following assumptions.
  1. a
    For the full fiscal year, an entity anticipates an ordinary loss of $100,000. The entity operates entirely in one jurisdiction where the tax rate is 50 percent. Anticipated tax credits for the fiscal year total $10,000. No events that do not have tax consequences are anticipated.
  2. b
    If there is a recognizable tax benefit for the loss and the tax credits pursuant to the requirements of Subtopic 740-10, computation of the estimated annual effective tax rate applicable to the ordinary loss would be as follows.
    • \"Tax benefit at statutory rate ($100,000 at 50%)\" \" $(50,000)\" Tax credits \" (10,000)\" Net tax benefit \" $(60,000)\" \"Estimated annual effective tax rate ($60,000 ÷ $100,000)\" 60%
","snippet":"Cases A, B, and C share the following assumptions.\n(a) For the full fiscal year, an entity anticipates an ordinary loss of $100,000. The entity operates entirely in one jurisdiction where the tax rate is 50 percent. Anti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9acf54fd9cbdd6d537373b8e870e45985d861062a08b571f06caa53c19df3de0","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-13","para":"55-13","html":"
Cases A, B, and C state varying assumptions with respect to assurance of realization of the components of the net tax benefit. When the realization of a component of the benefit is not expected to be realized during the current year or recognizable as a deferred tax asset at the end of the current year in accordance with the provisions of Subtopic 740-10, that component is not included in the computation of the estimated annual effective tax rate.
","snippet":"Cases A, B, and C state varying assumptions with respect to assurance of realization of the components of the net tax benefit. When the realization of a component of the benefit is not expected to be realized during the …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:67ebaf4fb393cb0341d1e7454924382691e648bdc4f1ac4fc191e43edee1ffe1","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-14","para":"55-14","html":"
The following Cases illustrate when realization of the tax benefit of the loss is more likely than not:
  1. a
    Ordinary losses in all interim periods (Case A1)
  2. b
    Ordinary income and losses in interim periods (Case A2).
","snippet":"The following Cases illustrate when realization of the tax benefit of the loss is more likely than not:\n(a) Ordinary losses in all interim periods (Case A1)\n(b) Ordinary income and losses in interim periods (Case A2).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0cfccc4f541eb695e8a666b4054fb0cc3f673315cff8ef9d0266539f60b650a8","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-15","para":"55-15","html":"
The entity has ordinary losses in all interim periods. The full tax benefit of the anticipated ordinary loss and the anticipated tax credits will be realized by carryback. Quarterly tax computations are as follows.
","snippet":"The entity has ordinary losses in all interim periods. The full tax benefit of the anticipated ordinary loss and the anticipated tax credits will be realized by carryback. Quarterly tax computations are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1dfc7bc97b070bb416ea71bb635de386f3b6da7dd6cfd29076c2c4db486ab2ae","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-16","para":"55-16","html":"
The entity has ordinary income and losses in interim periods and for the year to date. The full tax benefit of the anticipated ordinary loss and the anticipated tax credits will be realized by carryback. The full tax benefit of the maximum year-to-date ordinary loss can also be realized by carryback. Quarterly tax computations are as follows.
","snippet":"The entity has ordinary income and losses in interim periods and for the year to date. The full tax benefit of the anticipated ordinary loss and the anticipated tax credits will be realized by carryback. The full tax ben…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7083ce29ed19afeb4d7500259123cb31e49686f96e755af078c71053eada3b0c","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-17","para":"55-17","html":"
In Cases A1 and A2, if neither the tax benefit of the anticipated loss for the fiscal year nor anticipated tax credits were recognizable pursuant to Subtopic 740-10, the estimated annual effective tax rate for the year would be zero and no tax (or benefit) would be recognized in any quarter. That conclusion is not affected by changes in the mix of income and loss in interim periods during a fiscal year. However, see paragraph 740-270-30-18.
","snippet":"In Cases A1 and A2, if neither the tax benefit of the anticipated loss for the fiscal year nor anticipated tax credits were recognizable pursuant to Subtopic 740-10, the estimated annual effective tax rate for the year w…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9ad4d68d9bf1989297e3d993572f2b9398773c995749f30d47fd2921bd8848bd","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-18","para":"55-18","html":"
The following Cases illustrate when partial realization of the tax benefit of the loss is more likely than not:
  1. a
    Ordinary losses in all interim periods (Case C1)
  2. b
    Ordinary income and losses in interim periods (Case C2).
","snippet":"The following Cases illustrate when partial realization of the tax benefit of the loss is more likely than not:\n(a) Ordinary losses in all interim periods (Case C1)\n(b) Ordinary income and losses in interim periods (Case…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ced6dad0a047552d8482812068dcb3f3b205d1317c3814c33a44b240b07fd768","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-19","para":"55-19","html":"
The entity has an ordinary loss in all interim periods. It is more likely than not that the tax benefit of the loss in excess of $40,000 of prior income available to be offset by carryback ($20,000 of tax at the 50 percent statutory rate) will not be realized. Therefore the estimated annual effective tax rate is 20 percent ($20,000 benefit more likely than not to be realized divided by $100,000 estimated fiscal year ordinary loss). Quarterly tax computations are as follows.
","snippet":"The entity has an ordinary loss in all interim periods. It is more likely than not that the tax benefit of the loss in excess of $40,000 of prior income available to be offset by carryback ($20,000 of tax at the 50 perce…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a87103d5c980d995734cc7a4fa841d98056b11a032483d4919db18361aa339b3","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-20","para":"55-20","html":"
The entity has ordinary income and losses in interim periods and for the year to date. It is more likely than not that the tax benefit of the anticipated ordinary loss in excess of $40,000 of prior income available to be offset by carryback ($20,000 of tax at the 50 percent statutory rate) will not be realized. Therefore the estimated annual effective tax rate is 20 percent ($20,000 benefit more likely than not to be realized divided by $100,000 estimated fiscal year ordinary loss), and the benefit that can be recognized for the year to date is limited to $20,000 (the benefit that is more likely than not to be realized). Quarterly tax computations are as follows.
","snippet":"The entity has ordinary income and losses in interim periods and for the year to date. It is more likely than not that the tax benefit of the anticipated ordinary loss in excess of $40,000 of prior income available to be…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0e229ce9ae583f95a990036b0d457e4a4a4033aaadf26996fe58be9744123315","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-21","para":"55-21","html":"
The entity anticipates a fiscal year ordinary loss. The loss cannot be carried back, and future profits exclusive of reversing temporary differences are unlikely. Net deferred tax liabilities arising from existing net taxable temporary differences are present. A portion of the existing net taxable temporary differences relating to those liabilities will reverse within the loss carryforward period. Computation of the estimated annual effective tax rate to be used (see paragraphs
740-270-30-32 through 30-33
) is as follows.
","snippet":"The entity anticipates a fiscal year ordinary loss. The loss cannot be carried back, and future profits exclusive of reversing temporary differences are unlikely. Net deferred tax liabilities arising from existing net ta…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7d34cad3c8c1011083231c5d9418448ea38bc68f1797d5f378d6f9bc532a5116","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-22","para":"55-22","html":"
Quarterly tax computations are as follows.
","snippet":"Quarterly tax computations are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a699092fd92215caf7800bac9dae64619faba953c30bfa92dee6a29977339a41","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-23","para":"55-23","html":"
Note that changes in the timing of the loss by quarter would not change this computation.
","snippet":"Note that changes in the timing of the loss by quarter would not change this computation.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0faf3ddfb2d4a9e672f3da639464084723f7dfd52ad46c72f6ed63bda950cfe1","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-24","para":"55-24","html":"
The following Cases illustrate accounting for income taxes applicable to unusual or infrequently occurring items when ordinary income is expected for the fiscal year:
  1. a
    Realization of the tax benefit is more likely than not at date of occurrence (Case A)
  2. b
    Realization of the tax benefit not more likely than not at date of occurrence (Case B).
","snippet":"The following Cases illustrate accounting for income taxes applicable to unusual or infrequently occurring items when ordinary income is expected for the fiscal year:\n(a) Realization of the tax benefit is more likely tha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:75b81f235a1b25c33f841f579b34208af98e0db6f1e246f9a4a38e44ea011ddf","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-25","para":"55-25","html":"
Cases A and B illustrate the computation of the tax (or benefit) applicable to unusual or infrequently occurring items when ordinary income is anticipated for the fiscal year. These Cases are based on the assumptions and computations presented in paragraph 740-270-55-3 and Example 1, Cases A and B (see paragraphs
740-270-55-4 through 55-8
), plus additional information supplied in Cases A and B of this Example. The computation of the tax (or benefit) applicable to the ordinary income is not affected by the occurrence of an unusual or infrequently occurring item; therefore, each Case refers to one or more of the illustrations of that computation in Example 1, Cases A and B (see paragraphs
740-270-55-4 through 55-8
), and does not reproduce the computation and the assumptions. The income statement display for tax (or benefit) applicable to unusual or infrequently occurring items is illustrated in Example 7 (see paragraph 740-270-55-52).
","snippet":"Cases A and B illustrate the computation of the tax (or benefit) applicable to unusual or infrequently occurring items when ordinary income is anticipated for the fiscal year. These Cases are based on the assumptions and…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1ec4d5c77fdd50afa77759892c886d87bf08d05dd55b697e8a8cf192f3d85847","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-26","para":"55-26","html":"
As explained in paragraph 740-270-55-25, this Case is based on the computations of tax applicable to ordinary income that are illustrated in Example 1, Case A (see paragraph 740-270-55-4). In addition, the entity experiences a tax-deductible unusual or infrequently occurring loss of $50,000 (tax benefit $25,000) in the second quarter. Because the loss can be carried back, it is more likely than not that the tax benefit will be realized at the time of occurrence. Quarterly tax provisions are as follows.
","snippet":"As explained in paragraph 740-270-55-25, this Case is based on the computations of tax applicable to ordinary income that are illustrated in Example 1, Case A (see paragraph 740-270-55-4). In addition, the entity experie…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5ccb6a0089b7b4273c914f5b0c2f597cb368f6f69343571276f89ea405ef39ce","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-27","para":"55-27","html":"
Note that changes in assumptions would not change the timing of the recognition of the tax benefit applicable to the unusual or infrequently occurring item as long as realization is more likely than not.
","snippet":"Note that changes in assumptions would not change the timing of the recognition of the tax benefit applicable to the unusual or infrequently occurring item as long as realization is more likely than not.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8ccd0cc55db70de7edc21e2e8322d6436dc44e6526a8fae79f80d59643ba9167","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-28","para":"55-28","html":"
As explained in paragraph 740-270-55-25, this Case is based on the computations of tax applicable to ordinary income that are illustrated in Example 1, Cases A and B1 (see paragraphs
740-270-55-4 through 55-6
). In addition, the entity experiences a tax-deductible unusual or infrequently occurring loss of $50,000 (potential benefit $25,000) in the second quarter. The loss cannot be carried back, and available evidence indicates that a valuation allowance is needed for all of the deferred tax asset. As a result, the tax benefit of the unusual or infrequently occurring loss is recognized only to the extent of offsetting ordinary income for the year to date. Quarterly tax provisions under two different assumptions for the occurrence of ordinary income are as follows.
","snippet":"As explained in paragraph 740-270-55-25, this Case is based on the computations of tax applicable to ordinary income that are illustrated in Example 1, Cases A and B1 (see paragraphs 740-270-55-4 through 55-6). In additi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0c0dad3c1218e6116bb207c4063e515fb803d6e6a4fafafccdfb074e7cdfb296","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-29","para":"55-29","html":"
This Example illustrates the guidance in paragraph 740-270-45-7. An entity anticipates ordinary income for the year of $100,000 and tax credits of $10,000. The entity has ordinary income in all interim periods. The estimated annual effective tax rate is 40 percent, computed as follows.
","snippet":"This Example illustrates the guidance in paragraph 740-270-45-7. An entity anticipates ordinary income for the year of $100,000 and tax credits of $10,000. The entity has ordinary income in all interim periods. The estim…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ef35be00044ad6cfc2d0e350c9a0e7802d2d7b31c5a63a3d590810d48d0f393b","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-30","para":"55-30","html":"
Quarterly tax computations for the first two quarters are as follows.
","snippet":"Quarterly tax computations for the first two quarters are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:59cd8da04324e8befaefeef843dd5e9de53ac98c5550c9d88834e0474c70aea7","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-31","para":"55-31","html":"
In the third quarter a decision is made to discontinue the operations of Division X, a segment of the business that has recently operated at a loss (before income taxes). The pretax income (and losses) of the continuing operations of the entity and of Division X through the third quarter and the estimated fourth quarter results are as follows.
","snippet":"In the third quarter a decision is made to discontinue the operations of Division X, a segment of the business that has recently operated at a loss (before income taxes). The pretax income (and losses) of the continuing …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f2ed048052fe4e032080319ecb996dd92296ba2da746eea9750b507ae0723756","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-32","para":"55-32","html":"
No changes have occurred in continuing operations that would affect the estimated annual effective tax rate. Anticipated annual tax credits of $10,000 included $2,000 of credits related to the operations of Division X. The revised estimated annual effective tax rate applicable to ordinary income from continuing operations is 45 percent, computed as follows.
","snippet":"No changes have occurred in continuing operations that would affect the estimated annual effective tax rate. Anticipated annual tax credits of $10,000 included $2,000 of credits related to the operations of Division X. T…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4ba9c338fed7841dc3239fcea8ff8e3a5a73ec88a4337eb041a5c05fadf9a5d5","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-33","para":"55-33","html":"
Quarterly computations of tax applicable to ordinary income from continuing operations are as follows.
","snippet":"Quarterly computations of tax applicable to ordinary income from continuing operations are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9bdd387ef44eefd97fa5d6ea57b780a2f837e22bb6a8d84d98b39ad1037e09f2","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-34","para":"55-34","html":"
Tax benefit applicable to Division X for the first two quarters is computed as follows.
","snippet":"Tax benefit applicable to Division X for the first two quarters is computed as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:55a69255978ecd8fa559e5f0ebd500b882c51bef2d9fd79966d87d77d7274cbe","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-35","para":"55-35","html":"
The third quarter tax benefits applicable to both the loss from operations and the provision for loss on disposal of Division X are computed based on estimated annual income with and without the effects of the Division X losses. Current year tax credits related to the operations of Division X have not been recognized. It is assumed that the tax benefit of those credits will not be realized because of the discontinuance of Division X operations. Any reduction in tax benefits resulting from recapture of previously recognized tax credits resulting from discontinuance or current year tax credits applicable to the discontinued operations would be reflected in the tax benefit recognized for the loss on disposal or loss from operations as appropriate. If, because of capital gains and losses, and so forth, the individually computed tax effects of the items do not equal the aggregate tax effects of the items, the aggregate tax effects are allocated to the individual items in the same manner that they will be allocated in the annual financial statements. The computations are as follows.
","snippet":"The third quarter tax benefits applicable to both the loss from operations and the provision for loss on disposal of Division X are computed based on estimated annual income with and without the effects of the Division X…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2bd46e9f07a7f608c09128cba9248ea0c0e01f7f893f268068f4777fad634118","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-36","para":"55-36","html":"
The resulting revised quarterly tax provisions are summarized as follows.
","snippet":"The resulting revised quarterly tax provisions are summarized as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a5d378efecfe11086c8acd1eac346feabb4744011bc5d9683e760a9bede4c3dd","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-37","para":"55-37","html":"
The following Cases illustrate the guidance in paragraph 740-270-30-36 for accounting for income taxes applicable to ordinary income if an entity is subject to tax in multiple jurisdictions:
  1. a
    Ordinary income in all jurisdictions (Case A)
  2. b
    Ordinary loss in a jurisdiction; realization of the tax benefit not more likely than not (Case B)
  3. c
    Ordinary income or tax cannot be estimated in one jurisdiction (Case C).
","snippet":"The following Cases illustrate the guidance in paragraph 740-270-30-36 for accounting for income taxes applicable to ordinary income if an entity is subject to tax in multiple jurisdictions:\n(a) Ordinary income in all ju…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:742f57bb96b9ee2509c40ab96b80380d25cdaa98f3b516d7159cd005d0d87792","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-38","para":"55-38","html":"
Cases A, B, and C assume that an entity operates through separate corporate entities in two countries. Applicable tax rates are 50 percent in the United States and 20 percent in Country A. The entity has no unusual or infrequently occurring items during the fiscal year and anticipates no tax credits or events that do not have tax consequences. (The effect of foreign tax credits and the necessity of providing tax on undistributed earnings are ignored because of the wide range of tax planning alternatives available.) For the full fiscal year the entity anticipates ordinary income of $60,000 in the United States and $40,000 in Country A. The entity is able to make a reliable estimate of its Country A ordinary income and tax for the fiscal year in dollars. Computation of the overall estimated annual effective tax rate in Cases B and C is based on additional assumptions stated in those Cases.
","snippet":"Cases A, B, and C assume that an entity operates through separate corporate entities in two countries. Applicable tax rates are 50 percent in the United States and 20 percent in Country A. The entity has no unusual or in…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f036837513236feb67fcbc199bb7911475f37ca4392776629ed7b9b3c04d719d","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-39","para":"55-39","html":"
Computation of the overall estimated annual effective tax rate is as follows.
","snippet":"Computation of the overall estimated annual effective tax rate is as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b70be281e9c045340390eb2c2f3ae52831fc78dbbf2a128d2141730d9921b5aa","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-40","para":"55-40","html":"
Quarterly tax computations are as follows.
","snippet":"Quarterly tax computations are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2fc27a71196839d6c74a55f8b444c023a0e4128dc62e63ca29fc7b40bdbdffae","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-41","para":"55-41","html":"
In this Case, the entity operates through a separate corporate entity in Country B. Applicable tax rates in Country B are 40 percent. Operations in Country B have resulted in losses in recent years and an ordinary loss is anticipated for the current fiscal year in Country B. It is expected that the tax benefit of those losses will not be recognizable as a deferred tax asset at the end of the current year pursuant to Subtopic 740-10; accordingly, no tax benefit is recognized for losses in Country B, and interim period tax (or benefit) is separately computed for the ordinary loss in Country B and for the overall ordinary income in the United States and Country A. The tax applicable to the overall ordinary income in the United States and Country A is computed as in Case A of this Example. Quarterly tax provisions are as follows.
","snippet":"In this Case, the entity operates through a separate corporate entity in Country B. Applicable tax rates in Country B are 40 percent. Operations in Country B have resulted in losses in recent years and an ordinary loss i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:36701a0c08523613c371dd16ab94f27ac13be715d7d13414121c30f6e96d2125","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-42","para":"55-42","html":"
In this Case, the entity operates through a separate corporate entity in Country C. Applicable tax rates in Country C are 40 percent in foreign currency. Depreciation in that country is large and exchange rates have changed in prior years. The entity is unable to make a reasonable estimate of its ordinary income for the year in Country C and thus is unable to reasonably estimate its annual effective tax rate in Country C in dollars. Accordingly, tax (or benefit) in Country C is separately computed as ordinary income (or loss) occurs in Country C. The tax applicable to the overall ordinary income in the United States and Country A is computed as in Case A of this Example. Quarterly computations of tax applicable to Country C are as follows.
","snippet":"In this Case, the entity operates through a separate corporate entity in Country C. Applicable tax rates in Country C are 40 percent in foreign currency. Depreciation in that country is large and exchange rates have chan…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5e7dccc6eace585cbf8f8b8c67b63b1209ae54e51401f28064538b4cd16015e8","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-43","para":"55-43","html":"
Quarterly tax provisions are as follows.
","snippet":"Quarterly tax provisions are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8c00a8fe5c92e2ce8738fe0278a6765f02ef6deaccfe38ce832381655c0433e6","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-44","para":"55-44","html":"
The following Cases illustrate the guidance in paragraphs
740-270-25-5 through 25-6
for accounting in interim periods for the effect of new tax legislation on income taxes when legislation is effective in a future interim period.
  1. a
    Subparagraph superseded by Accounting Standards Update No. 2019-12.
  2. b
    Subparagraph superseded by Accounting Standards Update No. 2019-12.
","snippet":"The following Cases illustrate the guidance in paragraphs 740-270-25-5 through 25-6 for accounting in interim periods for the effect of new tax legislation on income taxes when legislation is effective in a future interi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:595a23a4a1bed8eb4d9ea75aa6c6f7be2594d73cb79c558eb3920099decc9cca","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-45","para":"55-45","html":"
The assumed facts applicable to this Example follow.
","snippet":"The assumed facts applicable to this Example follow.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:035b00bdd0afeba516979331742de082b796b466a0d9746a25eb5c3d1c37ef59","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-46","para":"55-46","html":"
For the full fiscal year, an entity anticipates ordinary income of $100,000. All income is taxable in one jurisdiction at a 50 percent rate. Anticipated tax credits for the fiscal year total $10,000. No events that do not have tax consequences are anticipated.
","snippet":"For the full fiscal year, an entity anticipates ordinary income of $100,000. All income is taxable in one jurisdiction at a 50 percent rate. Anticipated tax credits for the fiscal year total $10,000. No events that do no…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ebe87d17eba4e860abd5c17943f975d93a3e952ac1006d618ef9537731ba60d5","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-47","para":"55-47","html":"
Computation of the estimated annual effective tax rate applicable to ordinary income is as follows.
","snippet":"Computation of the estimated annual effective tax rate applicable to ordinary income is as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1081fbfe3beba9c0b94ef8bd1cad5e70380a117369e9a07f898b1d176575726a","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-48","para":"55-48","html":"
Further, assume that new legislation creating additional tax credits is enacted during the second quarter of the entity's fiscal year. The new legislation is effective on the first day of the third quarter. As a result of the estimated effect of the new legislation, the entity revises its estimate of its annual effective tax rate to the following.
","snippet":"Further, assume that new legislation creating additional tax credits is enacted during the second quarter of the entity's fiscal year. The new legislation is effective on the first day of the third quarter. As a result o…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3f53fd96ec10e51085287a493e07a447120b83adade4399e28ecaccdb3c2191d","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-49","para":"55-49","html":"
The effect of the new legislation shall be reflected in the computation of the annual effective tax rate beginning in the first interim period that includes the enactment date of the new legislation. Accordingly, quarterly tax computations are as follows.
","snippet":"The effect of the new legislation shall be reflected in the computation of the annual effective tax rate beginning in the first interim period that includes the enactment date of the new legislation. Accordingly, quarter…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e65fe57f1f139995493ed4607fa6985c218cef59d2e264dd0275a903dde73811","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-50","para":"55-50","html":"
Paragraph superseded by Accounting Standards Update No. 2019-12
","snippet":"Paragraph superseded by Accounting Standards Update No. 2019-12","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:385a55979bcb0b73c0d7194a97e6278031da835937f7c9b7b5aa67748dc9e248","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-51","para":"55-51","html":"
Paragraph superseded by Accounting Standards Update No. 2019-12
","snippet":"Paragraph superseded by Accounting Standards Update No. 2019-12","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f2f591d67c4e9a26dac2836a4984ac842225b8ba3c2990fe51f4ff75ea3abc8","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},{"citation":"270-740-55-52","para":"55-52","html":"
The following illustrates the location in an income statement display of the various tax amounts computed under this Subtopic.
","snippet":"The following illustrates the location in an income statement display of the various tax amounts computed under this Subtopic.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e7dcc71536d0dc5fb545e6bb8990d7f2797aff3a75c65adabc49b8a6ddc92446","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:692d6d3fcdfe84f2817e0bd917fa5e3afbe2d7f43e1ef3169cdb44fbeca3cb49","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4080864efab7f57e099160b8622fd5fb67619555615436c0c3479403d7212c4c","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4080864efab7f57e099160b8622fd5fb67619555615436c0c3479403d7212c4c","downloaded_from":"2026-09-09T23:20:44.855Z","last_downloaded_at":"2026-09-09T23:20:44.855Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478885","source_sha256":"115d02126f3f1fcaa8788f7cc96c8e18910af793741a6f93cc7a5ac3b1527681"}}