{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/740/944/#25-recognition","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":"740-944","subtopic_title":"Financial Services—Insurance","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Policyholder Dividends","paragraphs":[{"citation":"740-944-25-1","para":"25-1","html":"Although payment is not required, a dividend recognized under paragraph 944-50-25-3 is considered a planned contractual benefit in computing liabilities under generally accepted accounting principles (GAAP). However, it may be necessary to identify the amount of this dividend to calculate deferred income taxes in those cases in which there is a question as to whether the dividend provision in the liabilities, together with the dividends paid or declared, may exceed the amount of dividends otherwise deductible for federal income tax purposes. Except as noted in the following paragraph, a deferred tax liability or asset shall be recognized for the deferred tax consequences of temporary differences in accordance with Topic 740. As described in Topic 740, a life insurance entity shall not provide deferred taxes on taxable temporary differences related to policyholders' surplus that arose in fiscal years beginning on or before December 15, 1992. However, if circumstances indicate that the insurance entity is likely to pay income taxes, either currently or in later years, because of a known or expected reduction in policyholders' surplus, income taxes attributable to that reduction shall be accrued as a tax expense of the current period.