We have recently updated our Financial Reporting Insights, Accounting for Income Taxes – Interim Period Tax Reporting, which explains when and how income tax expenses or benefits are recorded during interim periods. It distinguishes between items recognized by applying an estimated annual effective tax rate to year-to-date operating results—known as ordinary income or loss—and specific events that are recognized separately when they happen.
This publication does not address every aspect of accounting for income taxes and should therefore be read in conjunction with the Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes.
