{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/740/10/#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":"740","topic_title":"Income Taxes","subtopic":"740-10","subtopic_title":"Overall","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"740-10-35-1","para":"35-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">Section <a altsource=\"GUID-CECDC2D3-2FC5-4C73-9787-AFB74CD491A7.ditamap\" class=\"ditamap\">740-10-30</a> addresses initial measurement of current and deferred income tax accounts. This Section addresses the accounting for certain changes subsequent to initial measurement. The guidance in this Section is incremental to the guidance for initial measurement.</div></div>","snippet":"Section 740-10-30 addresses initial measurement of current and deferred income tax accounts. This Section addresses the accounting for certain changes subsequent to initial measurement. The guidance in this Section is in…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:94cb44c2bb15f595ee214840933c20e546fbf411e421f8c247aba12c58883f8b","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f0343ba03f0e42d759aee0a3498d25d7e8030183e9066a8767b05209ba5d47d4","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}},{"block":null,"heading":"New Information Affecting Measurement of Tax Positions","paragraphs":[{"citation":"740-10-35-2","para":"35-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_09513C1E-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Subsequent 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> meeting the recognition requirements of paragraph <a href=\"/asc/740/10/#740-10-25-6\" class=\"xref\">740-10-25-6</a> shall be based on management's best judgment given the facts, circumstances, and information available at the reporting date. </span></span>Paragraph <a href=\"/asc/740/10/#740-10-30-7\" class=\"xref\">740-10-30-7</a> explains that the reporting date is the date of the entity's most recent statement of financial position. <span class=\"sfragment\" id=\"sfr_09513D3B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">A tax position need not be legally extinguished and its resolution need not be certain to subsequently measure the position. </span></span><span class=\"sfragment\" id=\"sfr_09513E21-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Subsequent changes in judgment that lead to changes in measurement shall result from the evaluation of new information and not from a new evaluation or new interpretation by management of information that was available in a previous financial reporting period. </span></span></div></div>","snippet":"Subsequent measurement of a tax position meeting the recognition requirements of paragraph 740-10-25-6 shall be based on management's best judgment given the facts, circumstances, and information available at the reporti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:79b7b2e02dd8f156a354e1e169600f987682bcbf9be22fe719ede0ab9d7ac3e0","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}},{"citation":"740-10-35-3","para":"35-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_09513EF0-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Paragraph <a href=\"/asc/740/10/#740-10-25-15\" class=\"xref\">740-10-25-15</a> requires that a change in judgment that results in a change in measurement of a tax position taken in a prior annual period (including any related interest and penalties) shall be recognized as a discrete item in the period in which the change occurs. </span></span> Paragraph <a href=\"/asc/270/740/#270-740-35-6\" class=\"xref\">740-270-35-6</a> addresses the different accounting required for such changes in a prior interim period within the same fiscal year.</div></div>","snippet":"Paragraph 740-10-25-15 requires that a change in judgment that results in a change in measurement of a tax position taken in a prior annual period (including any related interest and penalties) shall be recognized as a d…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:af888944170d5ff8641f5960982aa67162b3a57c67b43af835e568ebe2b349d8","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fbf0b799b3a64f3632ec90aeb46fe9ac6bef9db16b9c0cceb818418d557ab984","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}},{"block":null,"heading":"Changes in Tax Laws or Rates","paragraphs":[{"citation":"740-10-35-4","para":"35-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_09513FCB-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Deferred tax liabilities and assets shall be adjusted for the effect of a change in tax laws or rates. </span></span>A change in tax laws or rates may also require a reevaluation of a <a href=\"/glossary/v/#valuation-allowance\" class=\"term\" title=\"The portion of a deferred tax asset for which it is more likely than not that a tax benefit will not be realized.\"><span>valuation allowance</span></a> for deferred tax assets.</div></div>","snippet":"Deferred tax liabilities and assets shall be adjusted for the effect of a change in tax laws or rates. A change in tax laws or rates may also require a reevaluation of a valuation allowance for deferred tax assets.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:98866829f2ee42d570cfe32c8640a3f8f82ec291708bcd2380918dd0f5d1bbb0","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4b81e565a8c896646d01a32f28b44e833cee1ef2fed247333ee1d96ac1f32d5c","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}},{"block":null,"heading":"Deferred Credit Arising from Asset Acquisitions that Are Not Business Combinations","paragraphs":[{"citation":"740-10-35-5","para":"35-5","html":"<div class=\"asc-body\"><div class=\"norm-text\">A deferred credit may arise under the accounting required by paragraph <a href=\"/asc/740/10/#740-10-25-51\" class=\"xref\">740-10-25-51</a> when an asset is acquired outside of a business combination. <span class=\"sfragment\" id=\"sfr_095140A0-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Any deferred credit arising from the application of such accounting requirements shall be amortized to income tax expense in proportion to the realization of the tax benefits that gave rise to the deferred credit. </span></span></div></div>","snippet":"A deferred credit may arise under the accounting required by paragraph 740-10-25-51 when an asset is acquired outside of a business combination. Any deferred credit arising from the application of such accounting require…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:674fcc9b09fcfdf650c5a77af91cb8114316d4536e069f14ff4aefcc10744b25","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fc3a11f600408e3053655b01d0f744d77154e6681ed277ffc846cee8bfe6a6b9","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b5c08236ca177d51fdac885c00621d05c4dee7f13081b0da9d81e3ab6aeba374","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b5c08236ca177d51fdac885c00621d05c4dee7f13081b0da9d81e3ab6aeba374","downloaded_from":"2026-09-10T01:16:31.672Z","last_downloaded_at":"2026-09-10T01:16:31.672Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482576","source_sha256":"19ffd121955650c81cabb77708314497afab593a8ddeb207cd2a8f0a533fcea3"}}