# ASC 740-30-45: Income Taxes — Other Considerations or Special Areas — 45 Other Presentation Matters

Source: FASB Accounting Standards Codification, Basic View

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## ASC 740-30-45: 45 Other Presentation Matters

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#### Undistributed Earnings of Subsidiaries and Corporate Joint Ventures

##### [740-30-45-1](https://asc.understandingaccounting.org/asc/740/30/#740-30-45-1)

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This guidance addresses presentation in the income statement of specific types of adjustments to [income taxes](https://asc.understandingaccounting.org/glossary/i/#income-taxes "Domestic and foreign federal (national), state, and local (including franchise) taxes based on income."). The specific types of adjustments addressed result from either the recognition or derecognition of deferred income taxes related to exceptions to comprehensive recognition of deferred income taxes arising from investments in subsidiaries and corporate joint ventures.

##### [740-30-45-2](https://asc.understandingaccounting.org/asc/740/30/#740-30-45-2)

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Paragraph [740-30-25-18](https://asc.understandingaccounting.org/asc/740/30/#740-30-25-18) identifies situations where deferred tax liabilities are not recorded for specific temporary differences. Paragraph [740-30-25-19](https://asc.understandingaccounting.org/asc/740/30/#740-30-25-19) provides that if circumstances change and it becomes apparent that some or all of the undistributed earnings of a subsidiary will be remitted in the foreseeable future but income taxes have not been recognized by the parent entity, it shall accrue as an expense of the current period income taxes attributable to that remittance. If it becomes apparent that some or all of the undistributed earnings of a subsidiary on which income taxes have been accrued will not be remitted in the foreseeable future, the parent entity shall adjust income tax expense of the current period.

##### [740-30-45-3](https://asc.understandingaccounting.org/asc/740/30/#740-30-45-3)

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If a parent entity did not recognize income taxes on its equity in undistributed earnings of a subsidiary for the reasons cited in paragraph [740-30-25-17](https://asc.understandingaccounting.org/asc/740/30/#740-30-25-17) and the entity in which the investment is held ceases to be a subsidiary, paragraph [740-30-25-15](https://asc.understandingaccounting.org/asc/740/30/#740-30-25-15) requires that it shall accrue in the current period income taxes on the temporary difference related to its remaining investment in common stock in accordance with the guidance in Subtopic 740-10.