{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/740/20/#45-other-presentation-matters","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":"740-20","subtopic_title":"Intraperiod Tax Allocation","section":{"number":"45","label":"45 Other Presentation Matters","anchor":"45-other-presentation-matters","is_sec":false,"groups":[{"block":null,"heading":"Allocation of Income Tax Expense or Benefit for the Year","paragraphs":[{"citation":"740-20-45-1","para":"45-1","html":"
This guidance addresses the requirements to allocate total income tax expense or benefit. Subtopic 740-10 defines the requirements for computing total income tax expense or benefit for an entity. As defined by those requirements, total income tax expense or benefit includes current and deferred income taxes. After determining total income tax expense or benefit under those requirements, the intraperiod tax allocation guidance is used to allocate total income tax expense or benefit to different components of comprehensive income and shareholders' equity.
","snippet":"This guidance addresses the requirements to allocate total income tax expense or benefit. Subtopic 740-10 defines the requirements for computing total income tax expense or benefit for an entity. As defined by those requ…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2cc0820576c3b998d60bff96b5319fa94b6c2e29740aac1f437900eaf6d69f60","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-2","para":"45-2","html":"
Income tax expense or benefit for the year shall be allocated among:
  1. a
    Continuing operations
  2. b
    Discontinued operations
  3. c
    Subparagraph superseded by Accounting Standards Update No. 2015-01.
  4. d
    Other comprehensive income
  5. e
    Items charged or credited directly to shareholders' equity.
","snippet":"Income tax expense or benefit for the year shall be allocated among:\n(a) Continuing operations\n(b) Discontinued operations\n(c) Subparagraph superseded by Accounting Standards Update No. 2015-01.\n(d) Other comprehensive i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:205fa70d89a5a33789e40e28c3913fde6f8100115c0205c09df99962115c4a2d","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-3","para":"45-3","html":"
The tax benefit of an operating loss carryforward or carryback (other than for the exceptions related to the carryforwards identified at the end of this paragraph) shall be reported in the same manner as the source of the income or loss in the current year and not in the same manner as the source of the operating loss carryforward or taxes paid in a prior year or the source of expected future income that will result in realization of a deferred tax asset for an operating loss carryforward from the current year. The only exception is the tax effects of deductible temporary differences and carryforwards that are allocated to shareholders' equity in accordance with the provisions of paragraph 740-20-45-11(c) through (f).
  1. a
    Subparagraph not used.
  2. b
    Subparagraph not used.
","snippet":"The tax benefit of an operating loss carryforward or carryback (other than for the exceptions related to the carryforwards identified at the end of this paragraph) shall be reported in the same manner as the source of th…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:afa9478f650ff208d15223799b18cede1ecf00b692b7b3d35b4298ea7d860a54","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-4","para":"45-4","html":"
Paragraph 740-10-45-20 requires that changes in the beginning of the year balance of a valuation allowance caused by changes in judgment about the realization of deferred tax assets in future years are ordinarily allocated to continuing operations. That paragraph also identifies certain exceptions to that allocation guidance related to business combinations and the items specified in paragraph 740-20-45-11(c) through (f). The effect of other changes in the balance of a valuation allowance are allocated among continuing operations and items other than continuing operations using the general allocation methodology presented in this Section.
","snippet":"Paragraph 740-10-45-20 requires that changes in the beginning of the year balance of a valuation allowance caused by changes in judgment about the realization of deferred tax assets in future years are ordinarily allocat…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b5ab05879cb9868611f6cf64b26690b0ab8e64fde4b82a73f4b2019366216925","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-5","para":"45-5","html":"
See Section 740-20-55 for examples of the allocation of total tax expense or benefit to continuing operations, the effect of a tax credit carryforward, and an allocation to other comprehensive income.
","snippet":"See Section 740-20-55 for examples of the allocation of total tax expense or benefit to continuing operations, the effect of a tax credit carryforward, and an allocation to other comprehensive income.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:21b9c2f457838c3f7a397f4194f87b1b2e773170d473b1067d93def698f3ed64","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:be78c9daee11984d0e753f7b97e9bbc86bc2be138cc6ebd651f98e0afe73509d","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"block":null,"heading":"Allocation to Continuing Operations","paragraphs":[{"citation":"740-20-45-6","para":"45-6","html":"
This guidance addresses the allocation methodology for allocating total income tax expense or benefit to continuing operations. The amount of income tax expense or benefit allocated to continuing operations may include multiple components. The tax effect of pretax income or loss from current year continuing operations is always one component of the amount allocated to continuing operations.
","snippet":"This guidance addresses the allocation methodology for allocating total income tax expense or benefit to continuing operations. The amount of income tax expense or benefit allocated to continuing operations may include m…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c3cb846a057302786c62584c625d4586f5a46cd8a17296ba5f5ef3e41e2a3fa8","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-7","para":"45-7","html":"
The tax effect of pretax income or loss from continuing operations should be determined by a computation that does not consider the tax effects of items that are not included in continuing operations.
","snippet":"The tax effect of pretax income or loss from continuing operations should be determined by a computation that does not consider the tax effects of items that are not included in continuing operations.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7ea5fb32fbda1a7af45a49a898d423115780a587fc2d51f154743e0cb54f2685","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-8","para":"45-8","html":"
The amount allocated to continuing operations is the tax effect of the pretax income or loss from continuing operations that occurred during the year, plus or minus income tax effects of:
  1. a
    Changes in circumstances that cause a change in judgment about the realization of deferred tax assets in future years (see paragraph 740-10-45-20 for a discussion of exceptions to this allocation for certain items)
  2. b
    Changes in tax laws or rates (see paragraph 740-10-35-4)
  3. c
    Changes in tax status (see paragraphs 740-10-25-32 and 740-10-40-6)
  4. d
    Tax-deductible dividends paid to shareholders.
The remainder is allocated to items other than continuing operations in accordance with the provisions of paragraphs 740-20-45-12 and 740-20-45-14.
","snippet":"The amount allocated to continuing operations is the tax effect of the pretax income or loss from continuing operations that occurred during the year, plus or minus income tax effects of:\n(a) Changes in circumstances tha…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2aad64232e5b60b66b805ed5675967f8ec7cb88328aa0b8409879f66a7459d18","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-9","para":"45-9","html":"
See Example 1 (paragraph 740-20-55-1) for an example of the allocation of total tax expense or benefit to continuing operations.
","snippet":"See Example 1 (paragraph 740-20-55-1) for an example of the allocation of total tax expense or benefit to continuing operations.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3d216e95e04d4182c9b8eba1f500bb8e3015e65b3e67e65e6c77be81bcf51e90","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6ceaf3ef3e3a3ae48443e3e25996d664c25785bfa852b8a42d5e298c5273cee2","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"block":null,"heading":"Allocations to Items Other Than Continuing Operations","paragraphs":[{"citation":"740-20-45-10","para":"45-10","html":"
This guidance identifies specific items outside of continuing operations that require an allocation of income tax expense or benefit. It also establishes the methodology for allocation. That methodology differs depending on whether there is only one item other than continuing operations or whether there are multiple items other than continuing operations.
","snippet":"This guidance identifies specific items outside of continuing operations that require an allocation of income tax expense or benefit. It also establishes the methodology for allocation. That methodology differs depending…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5260400c3d9742feb534c0e27c43482ebda75d9b1f9995b7d039e5627913448d","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-11","para":"45-11","html":"
The tax effects of the following items occurring during the year shall be charged or credited directly to other comprehensive income or to related components of shareholders' equity:
  1. a
    Adjustments of the opening balance of retained earnings for certain changes in accounting principles or a correction of an error. Paragraph 250-10-45-8 addresses the effects of a change in accounting principle, including any related income tax effects.
  2. b
    Gains and losses included in comprehensive income but excluded from net income (for example, translation adjustments accounted for under the requirements of Topic 830 and changes in the unrealized holding gains and losses of securities classified as available-for-sale as required by Topic 320).
  3. c
    An increase or decrease in contributed capital (for example, deductible expenditures reported as a reduction of the proceeds from issuing capital stock).
  4. d
    Subparagraph superseded by Accounting Standards Update No. 2016-09.
  5. e
    Subparagraph superseded by Accounting Standards Update No. 2016-09.
  6. f
    Deductible temporary differences and carryforwards that existed at the date of a quasi reorganization.
  7. g
    All changes in the tax bases of assets and liabilities caused by transactions among or with shareholders shall be included in equity including the effect of valuation allowances initially required upon recognition of any related deferred tax assets. Changes in valuation allowances occurring in subsequent periods shall be included in the income statement.
","snippet":"The tax effects of the following items occurring during the year shall be charged or credited directly to other comprehensive income or to related components of shareholders' equity:\n(a) Adjustments of the opening balanc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a4352999f3489ad7c1500e6cf997dc85718205b03bfe638854aed4a331a20c3c","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a66fe303c64e4ed4bc16784d7b9fca9bc323407e51fe34dfb607e20812e1b18f","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"block":null,"heading":"Single Item of Allocation Other Than Continuing Operations","paragraphs":[{"citation":"740-20-45-12","para":"45-12","html":"
If there is only one item other than continuing operations, the portion of income tax expense or benefit for the year that remains after the allocation to continuing operations shall be allocated to that item.
","snippet":"If there is only one item other than continuing operations, the portion of income tax expense or benefit for the year that remains after the allocation to continuing operations shall be allocated to that item.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:aced2f29b39527bd6e0f0bd3a5eab8342cb4e58b1c5761201fdd1ddce1fa95e2","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-13","para":"45-13","html":"
See Example 2 (paragraph 740-20-55-8) for an example of the allocation of total tax expense or benefit to continuing operations and one other item.
","snippet":"See Example 2 (paragraph 740-20-55-8) for an example of the allocation of total tax expense or benefit to continuing operations and one other item.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0b5b39b52ad7d77594b751daebd21a120dbf2896c5bc11495b584fb0016a7b71","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2a00a1738c2bb63b92f8cb0c12731e2970e8d0bd43e60eada8fd41e4b225f0ac","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"block":null,"heading":"Multiple Items of Allocation Other Than Continuing Operations","paragraphs":[{"citation":"740-20-45-14","para":"45-14","html":"
If there are two or more items other than continuing operations, the amount that remains after the allocation to continuing operations shall be allocated among those other items in proportion to their individual effects on income tax expense or benefit for the year. When there are two or more items other than continuing operations, the sum of the separately calculated, individual effects of each item sometimes may not equal the amount of income tax expense or benefit for the year that remains after the allocation to continuing operations. In those circumstances, the procedures to allocate the remaining amount to items other than continuing operations are as follows:
  1. a
    Determine the effect on income tax expense or benefit for the year of the total net loss for all net loss items.
  2. b
    Apportion the tax benefit determined in (a) ratably to each net loss item.
  3. c
    Determine the amount that remains, that is, the difference between the amount to be allocated to all items other than continuing operations and the amount allocated to all net loss items.
  4. d
    Apportion the tax expense determined in (c) ratably to each net gain item.
","snippet":"If there are two or more items other than continuing operations, the amount that remains after the allocation to continuing operations shall be allocated among those other items in proportion to their individual effects …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3c89c0bae77eacd12f2ef8b80b6dd076a84095a816c1a1bdcc369393f96cddd5","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:35ae9285e53590a9df14b04cb549d0f8130b37b123efbe79ad5f426afb7a2a4e","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"block":null,"heading":"Presentation of Deferred Tax Assets Relating to Losses on Available-for-Sale Debt Securities","paragraphs":[{"citation":"740-20-45-15","para":"45-15","html":"
An entity that recognizes a deferred tax asset relating to a net unrealized loss on available-for-sale securities may at the same time conclude that it is more likely than not that some or all of that deferred tax asset will not be realized. In that circumstance, the entity shall report the offsetting entry to the valuation allowance in the component of other comprehensive income classified as unrealized gains and losses on certain investments in debt securities because the valuation allowance is directly related to the unrealized holding loss on the available-for-sale securities. The entity shall also report the offsetting entry to the valuation allowance in the component of other comprehensive income classified as unrealized gains and losses on certain investments in debt securities if the entity concludes on the need for a valuation allowance in a later interim period of the same fiscal year in which the deferred tax asset is initially recognized.
","snippet":"An entity that recognizes a deferred tax asset relating to a net unrealized loss on available-for-sale securities may at the same time conclude that it is more likely than not that some or all of that deferred tax asset …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:db68532e32b73f40fdd39deac33f26b24de1b7950af651f6a42a793a53884f6e","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-16","para":"45-16","html":"
An entity that does not need to recognize a valuation allowance at the same time that it establishes a deferred tax asset relating to a net unrealized loss on available-for-sale securities may, in a subsequent fiscal year, conclude that it is more likely than not that some or all of that deferred tax asset will not be realized. In that circumstance, if an entity initially decided that no valuation allowance was required at the time the unrealized loss was recognized but in a subsequent fiscal year decides that it is more likely than not that the deferred tax asset will not be realized, a valuation allowance shall be recognized. The entity shall include the offsetting entry as an item in determining income from continuing operations. The offsetting entry shall not be included in other comprehensive income.
","snippet":"An entity that does not need to recognize a valuation allowance at the same time that it establishes a deferred tax asset relating to a net unrealized loss on available-for-sale securities may, in a subsequent fiscal yea…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:188163a9fb11f0eb37fa3fec2509dd40324b3fd45740deef8632832d8b1a7347","downloaded_from":"2026-09-10T01:17:32.590Z","last_downloaded_at":"2026-09-10T01:17:32.590Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147482659","source_sha256":"785e28af4975b0db3527d0802e1b2b83d2e610c36b6a08eae0c0f158501aa2c7"}},{"citation":"740-20-45-17","para":"45-17","html":"
An entity that recognizes a deferred tax asset relating to a net unrealized loss on available-for-sale securities may, at the same time, conclude that a valuation allowance is warranted and in a subsequent fiscal year makes a change in judgment about the level of future years' taxable income such that all or a portion of that valuation allowance is no longer warranted. In that circumstance, the entity shall include any reversals in the valuation allowance due to such a change in judgment in subsequent fiscal years as an item in determining income from continuing operations, even though initial recognition of the valuation allowance affected the component of other comprehensive income classified as unrealized gains and losses on certain investments in debt securities. If, rather than a change in judgment about future years' taxable income, the entity generates taxable income in the current year (subsequent to the year the related deferred tax asset was recognized) that can use the benefit of the deferred tax asset, the elimination (or reduction) of the valuation allowance is allocated to that taxable income. Paragraph 740-10-45-20 provides additional information.
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An entity that has recognized a deferred tax asset relating to other deductible temporary differences in a previous fiscal year may at the same time have concluded that no valuation allowance was warranted. If in the current year an entity recognizes a deferred tax asset relating to a net unrealized loss on available-for-sale securities that arose in the current year and at the same time concludes that a valuation allowance is warranted, management shall determine the extent to which the valuation allowance is directly related to the unrealized loss and the other deductible temporary differences, such as an accrual for other postemployment benefits. The entity shall report the offsetting entry to the valuation allowance in the component of other comprehensive income classified as unrealized gains and losses on certain investments in debt securities only to the extent the valuation allowance is directly related to the unrealized loss on the available-for-sale securities that arose in the current year.
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