Negotiating a Stock Sale? Watch out for old deferred taxes!

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When negotiating a stock sale transaction, you are stepping into the shoes of the selling party when it comes to reporting deferred income tax (benefit) items on the closing balance sheet. One little secret of the accounting profession you need to keep in mind is that the deferred income tax provision is not an exact calculation; judgment and materiality are factors that come into play, affecting the overall calculation. For example, many auditors apply materiality or, where applicable, indemnity clause provisions to avoid recording contingent liability for deferred income taxes under ASC 740-10 (formerly FIN 48 and FAS 109).

Therefore, …read more

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Aronson LLC has been thinking ahead for its clients for more than 50 years. Aronson’s construction, real estate, government contracting, nonprofit, technology and private industry experts provide innovative audit, tax, and consulting services that help its clients move to the next level. From start-up to exit strategy, Aronson works with companies throughout the entire business lifecycle by proactively identifying opportunities and addressing challenges so that clients are able to focus on their core business. Aronson shows companies how to rethink everything to be more profitable, more competitive and better prepared for the future.

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