# ASC 740-10-15: Income Taxes — Overall — 15 Scope and Scope Exceptions Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/740/10/#15-scope-and-scope-exceptions) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:16:20.073Z to 2026-09-10T01:16:20.073Z Record version: sha256:a8e80f389c43c04d648b8c31b2fd347721f320ae4ad651e0395d267ad8099975 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 740-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/740/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [740-10-15-1](https://asc.understandingaccounting.org/asc/740/10/#740-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:20.073Z to 2026-09-10T01:16:20.073Z Record version: sha256:537020186b80da69aa818106b10800508278672196494d1b86758cfd44d153d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for all Subtopics of the [Income Taxes](https://asc.understandingaccounting.org/glossary/i/#income-taxes "Domestic and foreign federal (national), state, and local (including franchise) taxes based on income.") Topic. Unless explicitly addressed within specific Subtopics, the following scope guidance applies to all Subtopics of the Income Taxes Topic. #### Entities ##### [740-10-15-2](https://asc.understandingaccounting.org/asc/740/10/#740-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:20.073Z to 2026-09-10T01:16:20.073Z Record version: sha256:8271942053a004cbc9b852331ab351d609a4e7867027fe9ca9c92de4c0b4137b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The principles and requirements of the Income Taxes Topic are applicable to domestic and foreign entities in preparing financial statements in accordance with U.S. generally accepted accounting principles (GAAP), including not-for-profit entities (NFP) with activities that are subject to income taxes. ##### [740-10-15-2A](https://asc.understandingaccounting.org/asc/740/10/#740-10-15-2A) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:20.073Z to 2026-09-10T01:16:20.073Z Record version: sha256:1b488753158cc6c8070c7a84d76d8ac1574e6724feb6341f3ccf904b5fc32e32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [740-10-15-2AA](https://asc.understandingaccounting.org/asc/740/10/#740-10-15-2AA) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:20.073Z to 2026-09-10T01:16:20.073Z Record version: sha256:6b6b64a8e92b49c843d19dd214a358bb146338da22df72f37603c2976c1050be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic relating to accounting for uncertainty in income taxes applies to all entities, including tax-exempt not-for-profit entities, pass-through entities, and entities that are taxed in a manner similar to pass-through entities such as real estate investment trusts and registered investment companies. ##### [740-10-15-2B](https://asc.understandingaccounting.org/asc/740/10/#740-10-15-2B) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:20.073Z to 2026-09-10T01:16:20.073Z Record version: sha256:3d714e340e5c6d19b4ec3b476317b47211d80519ad9dc1f577c74ea94665b807 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Transactions ##### [740-10-15-3](https://asc.understandingaccounting.org/asc/740/10/#740-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:20.073Z to 2026-09-10T01:16:20.073Z Record version: sha256:7851325880525d3522bb60aeb03b669dfbc597e741a7e95b4f51950b80927a3f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Income Taxes Topic applies to: 1. a Domestic federal (national) income taxes (U.S. federal income taxes for U.S. entities) and foreign, state, and local (including franchise) taxes based on income 2. b An entity's domestic and foreign operations that are consolidated, combined, or accounted for by the equity method. ##### [740-10-15-4](https://asc.understandingaccounting.org/asc/740/10/#740-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:20.073Z to 2026-09-10T01:16:20.073Z Record version: sha256:6eaff84510c27aa06b85304fb5bf1b04bd1d513032b19fb6902efc70ee2e4c8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic does not apply to the following transactions and activities: 1. a A franchise tax (or similar tax) to the extent it is based on capital or a non-income-based amount and there is no portion of the tax based on income. If a franchise tax (or similar tax) is partially based on income (for example, an entity pays the greater of an income-based tax and a non-income-based tax), deferred tax assets and liabilities shall be recognized and accounted for in accordance with this Topic. Deferred tax assets and liabilities shall be measured using the applicable statutory income tax rate. An entity shall not consider the effect of potentially paying a non-income-based tax in future years when evaluating the realizability of its deferred tax assets. The amount of current tax expense equal to the amount that is based on income shall be accounted for in accordance with this Topic, with any incremental amount incurred accounted for as a non-income-based tax. See Example 17 (paragraph [740-10-55-139](https://asc.understandingaccounting.org/asc/740/10/#740-10-55-139)) for an example of how to apply this guidance. 2. b A withholding tax for the benefit of the recipients of a dividend. A tax that is assessed on an entity based on dividends distributed is, in effect, a withholding tax for the benefit of recipients of the dividend and is not an income tax if both of the following conditions are met: 1. 1 The tax is payable by the entity if and only if a dividend is distributed to shareholders. The tax does not reduce future income taxes the entity would otherwise pay. 2. 2 Shareholders receiving the dividend are entitled to a tax credit at least equal to the tax paid by the entity and that credit is realizable either as a refund or as a reduction of taxes otherwise due, regardless of the tax status of the shareholders. See the guidance in paragraphs [740-10-55-72 through 55-74](https://asc.understandingaccounting.org/asc/740/10/#740-10-55-72) dealing with determining whether a payment made to a taxing authority based on dividends distributed is an income tax.