# ASC 740-852-05: Income Taxes — Reorganizations — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

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## ASC 740-852-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/740/852/#05-overview-and-background)

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##### [740-852-05-1](https://asc.understandingaccounting.org/asc/740/852/#740-852-05-1)

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This Subtopic provides incremental guidance on accounting for [income taxes](https://asc.understandingaccounting.org/glossary/i/#income-taxes "Domestic and foreign federal (national), state, and local (including franchise) taxes based on income.") if an entity:

1.  a
    
    Has filed a [petition](https://asc.understandingaccounting.org/glossary/p/#petition "A document filed in a court of bankruptcy, initiating proceedings under the Bankruptcy Code.") with the [Bankruptcy Court](https://asc.understandingaccounting.org/glossary/b/#bankruptcy-court "The United States Bankruptcy Court is an adjunct of the United States District Courts. Under the jurisdiction of the District Court, the Bankruptcy Court is generally responsible for cases filed under Chapters 7, 11, 12, and 13 of the Bankruptcy Code.") and expects to reorganize as a going concern under [Chapter 11](https://asc.understandingaccounting.org/glossary/c/#chapter-11 "A reorganization action, either voluntarily or involuntarily initiated under the provisions of the Bankruptcy Code, that provides for a reorganization of the debt and equity structure of the business and allows the business to continue operations. A debtor may also file a plan of liquidation under Chapter 11.") of the [Bankruptcy Code](https://asc.understandingaccounting.org/glossary/b/#bankruptcy-code "A federal statute, enacted October 1, 1979, as title 11 of the United States Code by the Bankruptcy Reform Act of 1978, that applies to all cases filed on or after its enactment and that provides the basis for the current federal bankruptcy system.") and qualifies for fresh-start reporting under paragraph [852-10-45-19](https://asc.understandingaccounting.org/asc/852/10/#852-10-45-19)
    
2.  b
    
    Has undertaken a corporate readjustment procedure known as a quasi-reorganization.