If Financial Interpretation No. 48—the new accounting rule forcing companies to estimate the validity of their tax strategies—is keeping you up at night, imagine what it’s doing to your friends, colleagues and neighbors who work with Chinese companies.
Enacted by the Financial Accounting Standards Board at the start of this year, the unpopular rule specifically requires companies to disclose how certain or uncertain they are that their tax positions will pass muster with local taxing authorities, and then book a liability proportionate to that certainty.
