On October 15, the Financial Accounting Standards Board (FASB) granted to all nonpublic entities a one-year deferral on implementing FIN 48 until fiscal years beginning after December 15, 2008. FASB previously had considered limiting the deferral to pass-through entities only. FASB’s Statement of Financial Accounting Standards (SFAS) No. 109 (Accounting for Income Taxes) establishes financial accounting and reporting standards for the effects of income taxes that result from an enterprise’s activities during the current and preceding years. Standard No. 48 (FIN 48) (Accounting for Uncertainty in Income Taxes), clarifies the application of SFAS No. 109 by establishing a threshold condition that a tax position must meet for any part of the benefit of that position to be recognized in financial statements. Under FIN 48, tax benefits from uncertain tax positions that reduce an enterprise’s current or future income tax liability are reported in its financial statements only to the extent each benefit is recognized and measured under a two-step process: (1) the enterprise must evaluate the technical merits, based on tax authorities, of each tax position to determine whether it is “more-likely-than-not” (i.e., more than 50 percent likely) that the position would be sustained upon examination by a tax authority that has full knowledge of all relevant information; and (2) if a tax position satisfies the more-likely-than-not threshold, the enterprise then must measure the amount of tax benefit from the position that can be recognized in the financial statements. Under a cumulative probability approach, an enterprise records in its financial statements the largest amount of tax benefit that is greater than 50 percent likely of being realized. FIN 48 also provides guidance on measurement, derecognition, classification and disclosure of tax positions. The Staff Position proposed on October 15 will have a 30-day comment period, after which time separate guidance will be issued dealing with passthroughs and existing disclosure requirements for nonpublic entities.