What is ASC 740?

ASC 740 refers to Accounting Standards Codification (ASC) 740, which is the Financial Accounting Standards Board's (FASB) standard on accounting for income taxes. It requires companies to recognize the current and deferred tax consequences of all transactions recognized in a company's financial statements. It is commonly used by accountants and financial professionals to accurately report income taxes in financial statements, ensuring compliance with US Generally Accepted Accounting Principles (GAAP).