Understanding the basics of SFAS 109

Purpose – This paper aims to describe the SFAS 109/Financial Accounting Standards Board (FASB) Accounting Standards Codification 740. Design/methodology/approach – This paper is an overview of a topic. Findings – SFAS 109 establishes the financial accounting and reporting standards for the effects of federal, state and foreign income taxes. Originality/value – The paper is a good discussion for non‐tax financial executives. It is a valuable read for anyone looking for an introductory paper on the subject.