Sealy Corporation and Subsidiaries, f.k.a. The Ohio Mattress Company and Subsidiaries, et al. - Page 13

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          determined the fact of the liability and (b) the amount of the                     
          liability could be determined with reasonable accuracy.  United                    
          States v. Anderson, 269 U.S. 422, 437-438, 441 (1926).  DEFRA                      
          sec. 91(a), 98 Stat. 606, provided that the all events test is                     
          not met before economic performance occurs.  Sec. 461(h)(1).  In                   
          the case of liability to pay a person who provides goods or                        
          services to the taxpayer, economic performance occurs as that                      
          person provides the goods or services to the taxpayer.  Sec.                       
          461(h)(2)(A)(i).                                                                   
                In the legislative history accompanying enactment of the                     
          economic performance rules, Congress described the pre-DEFRA law,                  
          gave an overview of the House bill, discussed the economic                         
          performance rules added by DEFRA, and described the predecessor                    
          of the specified liability loss rule.  The conference report for                   
          DEFRA states in pertinent part:                                                    
                                  G.  Accounting Changes                                     
                                  1.  Premature accruals                                     
                          *     *     *     *     *     *     *                              
                     Economic Performance                                                    
                     *     *     *     *     *     *     *                                   
                     Net operating loss carrybacks                                           
                           The House bill provides a 10-year carryback                       
                     for net operating losses attributable to certain                        
                     liabilities deferred under these provisions.  The                       
                     bill also provides a special carryback rule for                         
                     losses incurred in connection with the                                  
                     decommissioning of a nuclear power plant.  Such                         





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