# ASC 740-10-35: Income Taxes — Overall — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/740/10/#35-subsequent-measurement) 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): 2026-09-10T01:16:31.672Z to 2026-09-10T01:16:31.672Z Record version: sha256:b5c08236ca177d51fdac885c00621d05c4dee7f13081b0da9d81e3ab6aeba374 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 740-10-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/740/10/#35-subsequent-measurement) SEC content: no ##### [740-10-35-1](https://asc.understandingaccounting.org/asc/740/10/#740-10-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:31.672Z to 2026-09-10T01:16:31.672Z Record version: sha256:94cb44c2bb15f595ee214840933c20e546fbf411e421f8c247aba12c58883f8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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 incremental to the guidance for initial measurement. #### New Information Affecting Measurement of Tax Positions ##### [740-10-35-2](https://asc.understandingaccounting.org/asc/740/10/#740-10-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:31.672Z to 2026-09-10T01:16:31.672Z Record version: sha256:79b7b2e02dd8f156a354e1e169600f987682bcbf9be22fe719ede0ab9d7ac3e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Subsequent measurement of a [tax position](https://asc.understandingaccounting.org/glossary/t/#tax-position "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.") meeting the recognition requirements of paragraph [740-10-25-6](https://asc.understandingaccounting.org/asc/740/10/#740-10-25-6) shall be based on management's best judgment given the facts, circumstances, and information available at the reporting date. Paragraph [740-10-30-7](https://asc.understandingaccounting.org/asc/740/10/#740-10-30-7) explains that the reporting date is the date of the entity's most recent statement of financial position. A tax position need not be legally extinguished and its resolution need not be certain to subsequently measure the position. 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. ##### [740-10-35-3](https://asc.understandingaccounting.org/asc/740/10/#740-10-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:31.672Z to 2026-09-10T01:16:31.672Z Record version: sha256:af888944170d5ff8641f5960982aa67162b3a57c67b43af835e568ebe2b349d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [740-10-25-15](https://asc.understandingaccounting.org/asc/740/10/#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 discrete item in the period in which the change occurs. Paragraph [740-270-35-6](https://asc.understandingaccounting.org/asc/270/740/#270-740-35-6) addresses the different accounting required for such changes in a prior interim period within the same fiscal year. #### Changes in Tax Laws or Rates ##### [740-10-35-4](https://asc.understandingaccounting.org/asc/740/10/#740-10-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:31.672Z to 2026-09-10T01:16:31.672Z Record version: sha256:98866829f2ee42d570cfe32c8640a3f8f82ec291708bcd2380918dd0f5d1bbb0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/v/#valuation-allowance "The portion of a deferred tax asset for which it is more likely than not that a tax benefit will not be realized.") for deferred tax assets. #### Deferred Credit Arising from Asset Acquisitions that Are Not Business Combinations ##### [740-10-35-5](https://asc.understandingaccounting.org/asc/740/10/#740-10-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:16:31.672Z to 2026-09-10T01:16:31.672Z Record version: sha256:674fcc9b09fcfdf650c5a77af91cb8114316d4536e069f14ff4aefcc10744b25 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A deferred credit may arise under the accounting required by paragraph [740-10-25-51](https://asc.understandingaccounting.org/asc/740/10/#740-10-25-51) when an asset is acquired outside of a business combination. 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.