In general, the purpose of ASC 740 (SFAS 109) is to compute and disclose the taxes payable by a business entity to state, local, Federal, and foreign governments, for the current year and all future years.

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ASC 740 (SFAS 109) is a standard that governs how businesses calculate and disclose their income tax liabilities. It requires companies to recognize the tax consequences of transactions in the financial statements, and to account for the differences between the income tax expense recorded on their financial statements and the taxes payable to the relevant authorities. The standard applies to all taxable entities and covers all types of taxes, including income tax, sales tax, property tax, and payroll tax.

In General, the Purpose of ASC 740 (SFAS 109) Is