Currently, the accounting for uncertainty in income taxes, which is based upon validity of a tax position, is subject to significant and varied interpretations that have resulted in diverse and inconsistent accounting practices and measurements.

FASB Statement No. 109, Accounting for Income Taxes, prescribes a consistent recognition threshold and measurement attribute, as well as criteria for subsequently recognizing, derecognizing and measuring such tax positions for financial statement purposes. The interpretation also requires expanded disclosure with respect to the uncertainty in income taxes.

"Today's interpretation reflects our concerns that widespread diversity in practice, including inconsistent measurement associated with uncertainty in accounting for income taxes, has resulted in less relevant, less comparable and less complete information for investors and other users of financial statements," said FASB member Edward W. Trott. "Consequently, we are addressing these concerns by requiring all tax positions be evaluated using consistent criteria and measurement and further supplemented by enhanced disclosure."

This interpretation, which incorporates comments received from FASB constituents, as well as views expressed during a public roundtable, is effective for fiscal years beginning after December 15, 2006.