Page 93 - International Taxation IRS Training Guides

Indefinite Reinvestment
Assertion

Pre-TCJA

GAAP purposes, foreign subsidiaries were
 For US

earnings to USP.
presumed to repatriate all

• Financial Accounting Standards
Board (FASB) Accounting

Standards
Codification (ASC) Subtopic 740-30-25-3.
on such earnings is taken into account for book
• The future tax
even though such earnings are not subject to tax yet.
purposes

 However, USP could make an assertion under
ASC

AICPA APB Opinion No. 23) that
740-30-25-17 (former
are indefinitely reinvested, i.e., the
its earnings

indefinite reinvestment
assertion (IRA)*, if USP has

specific
plans for reinvestment of those earnings.

• As
such, an MNE can defer when GAAP financial statements
liability on foreign subsidiary earnings.
include the tax

*Formerly known as permanently reinvested income or “PRI” 8