Joseph F. Leary, a speaker at the marcus evans Tax Officers Summit XVI Fall 2013, on navigating through ASC 740 Tax Provision (Formerly FAS 109) successfully. Interview with: Joseph F. Leary, Director of Taxation, Gentek, Inc.

1. What Tax Officers Need to Know
about ASC 740
Interview with: Joseph F. Leary,
Director of Taxation, Gentek, Inc.
organizations require at least quarterly
computations of income tax expense
and balance sheet tax accounts.
“The Accounting Standards Codification
(ASC) 740 presents direct and indirect
challenges for today’s tax officers.
Fundamentally, detailed recordkeeping
is required at the transactional level
when there is an income tax effect,
differences in book basis and tax basis
balance sheet accounts must be
reconciled, and integrated tax accounts
including income tax expense, current
and deferred income taxes, and tax
reserve accounts must be maintained.
In addition, Sarbanes-Oxley requires
formal policies and procedures that
must be tested for compliance. ASC 740
and FIN 48 are complex accounting
pronouncements that often require
specialized expertise,” says Joseph F.
Leary, Director of Taxation, Gentek, Inc.
Many transactions, depending on the
timing and nature of the underlying
transaction, will require the establishment of a deferred asset or liability.
Deferred items must be monitored to
identify when an asset or liability turns
around, whether it is appropriate to
carry an asset or liability, and whether a
valuation allowance is required.
A speaker at the marcus evans Tax
Officers Summit XVI Fall 2013, in
Las Vegas, Nevada, November 14-16,
Leary puts the ASC 740 under the
spotlight.
What difficulties are tax officers
facing with ACS 740?
The difficulties can be mind-boggling for
all but the least complex organizations.
Detailed data may not be available on
an entity’s systems, and in many cases
organizational systems integration with
tax systems or processes is not a
supported organizational priority. Again,
depending on an organiz ation’s
complexity and budget, tax systems
may range from internally developed
spreadsheet applications to highly
customized platforms with a host of
variations in-between.
Internal auditors may be far more
involved in tax department processes
and disagreements with external
auditors may have material impacts on
entity financial results.
Many organizations require monthly
updates to tax accounts, and all
In a changing business environment, how should the tax function
be managed?
There is no one-size-fits-all answer.
However, at a high level tax officers
have three core missions: ensure that
tax effects are properly reported in
financial statements, federal, state, local
and foreign tax compliance, and
judicious tax planning. Organizations
must determine whether and to what
extent tax functions may be handled
externally.
What future trends
directors prepare for?
should
tax
The functions performed by tax
departments have never before been
subject to as much scrutiny as currently
exists. While burdens placed on tax
departments rapidly grow, organizations
routinely shrink badly needed resources
that are necessary to reliably perform
assigned functions.
Voluminous demands for fast and
accurate access to and retention of data
seem to grow exponentially.
What characteristics will
require of team members?
this
All members of a tax department,
regardless of level, should have a
working familiarity with ASC 740 that
will enable both issue identification and
technical application. Directors and
managers should be very well versed
and should take a hands-on approach.
Of course, however, tax positions will
vary across organizations and the
degree of ASC 740 complexity will vary
accordingly.
Any final words of advice?
Tax officers must stay involved.
Unexpected ASC 740 issues can have a
material impact on financial statements
and can lead to embarrassing SarbanesOxley weaknesses. Address issues
immediately, as they arise. If you let
them fester, they will only get worse.
Tax
directors
must be
prepared for
everything
to be looked
at under a
microscope

2. About the Tax Officers Summit XVI Fall 2013
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industry thought leaders and solution providers to a highly focused and interactive
networking
event.
The
Summit
includes
presentations
on
corporate
tax
management, international tax planning, corporate tax reform and transfer pricing
policy.
www.taxofficerssummit.com
Contact
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