2: Case Deloitte and Touche Case Bricks & Mortar Due Date: Tuesday, November 6th, 2012, beginning of class You may prepare the solution to this case in groups of up to 4 people. Your solution to this case must be typed. Please include your names on a cover sheet to the assignment. Students must submit one case solution per group. I suggest that you each bring a copy of your solution to class to use during class discussion of the case. The purpose of this case is for you to work on your research skills as they relate to financial accounting issues. This means you will read accounting standards and apply them to a particular situation. While this is particularly useful for those who plan to take the CPA exam, it is generally useful for everyone as it forces you to work on your ability to generate logical arguments to unstructured situations as well as learn to
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Management is highly confident that all other tax positions will be sustained by the taxing authority upon examination (recognition) and that 100 Copyright 2007 Deloitte Development LLC All Rights Reserved. Case 09-9: Bricks & Mortar Page 2 percent of the deductions claimed in the tax return should be reflected in the financial statements (measurement) because they are based on clear and unambiguous tax law. Refer to Appendix A for information about situations in which interest and penalties could be assessed by the taxing authority. For Issues 1 and 2, assume that each of the tax positions has substantial authority for the purpose of determining whether penalties may be assessed. Issue 1 Facts: As a result of implementing a certain tax strategy, the Company has included a $100 deduction in its draft tax return, resulting in a $40 reduction to taxes payable. There is uncertainty over whether the tax strategy is sustainable under the law tax and therefore over whether the additional $100 is deductible for tax
Management is highly confident that all other tax positions will be sustained by the taxing authority upon examination (recognition) and that 100 Copyright 2007 Deloitte Development LLC All Rights Reserved. Case 09-9: Bricks & Mortar Page 2 percent of the deductions claimed in the tax return should be reflected in the financial statements (measurement) because they are based on clear and unambiguous tax law. Refer to Appendix A for information about situations in which interest and penalties could be assessed by the taxing authority. For Issues 1 and 2, assume that each of the tax positions has substantial authority for the purpose of determining whether penalties may be assessed. Issue 1 Facts: As a result of implementing a certain tax strategy, the Company has included a $100 deduction in its draft tax return, resulting in a $40 reduction to taxes payable. There is uncertainty over whether the tax strategy is sustainable under the law tax and therefore over whether the additional $100 is deductible for tax