Under APB Opinion No. 23, parent-level income taxes are recorded on a foreign subsidiary's earnings only in the year in which they are paid.

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APB Opinion No. 23 allows for the deferral of U.S. income taxes on the undistributed earnings of a foreign subsidiary unless it is apparent that those earnings will be remitted to the parent company. Taxes are not necessarily recorded only in the year they are paid; rather, they may be deferred until it is determined that the earnings will be repatriated.