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taxes in connection with a purchase business combination. The deferred taxes are recognized as part of the purchase price allocation and are not included in income in the period of the business combination. Statement 109 does not, however, provide specific accounting guidance for asset purchases that are not business combinations. Statement 109 also does not provide specific accounting guidance for payments made to obtain a future tax benefit that is in excess of the amount paid. Paragraph 16 of Statement 109 addresses recognition of deferred taxes and requires that an enterprise recognize a deferred tax liability or asset for all temporary differences. With certain specified exceptions, deferred tax expense or benefit for the year is measured as the change in an enterprise’s deferred tax assets and liabilities. [Note: See STATUS section.] Copyright © 2008, Financial Accounting Standards Board Not for redistribution Page 12. The issues are: Issue 1—How the tax effect of asset purchases that are not business combinations in which the amount paid differs from the tax basis 1 of the asset should be accounted for Issue 2—How the net tax benefit resulting from a purchase of future tax benefits from a third party that is not a government acting in its capacity as a taxing authority should be accounted for Issue 3—Whether all transactions directly with a government (in its capacity as a taxing authority) should be accounted for in a similar manner

Year: 2001
OAI identifier: oai:CiteSeerX.psu:10.1.1.353.2490
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