The major purpose of ASC 740 (SFAS 109) is to build a cushion into currently reported income tax expense in order to insure that the financial statements are conservative.

Question

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ASC 740 (formerly SFAS 109) is designed to account for income taxes by recognizing deferred tax assets and liabilities, not to create a cushion for conservatism in financial statements.

The Major Purpose of ASC 740 (SFAS 109) Is to Build