The FASB issued guidance regarding accounting for uncertainty in income taxes included in ASC 740-10. This guidance applies to all entities, both public and non-public, and explicitly includes investment companies.

Uncertain tax position guidance in general, and its specific application to investment companies, has been an evolving area. ASC 740-10 requires qualitative and quantitative disclosures, including discussions of reasonably possible changes that might occur in the recognized tax benefits over the next 12 months; a description of open tax years by major jurisdictions; and a roll-forward of all unrecognized tax benefits, presented as a reconciliation of the beginning and ending balances of the unrecognized tax benefits on a worldwide aggregated basis. For more discussion on this topic, see TX, PwC’s accounting and financial reporting guide Income Taxes, as well as Asset Management Advisory 2009-30 for illustrative disclosures relating to uncertain tax positions. See Asset Management Advisories 2010-17 and 2011-5 for a discussion on capital gains taxes imposed by non US jurisdictions.