Indefinite Reversal

Condition in which Interperiod Income Tax Allocation is not required for the undistributed earnings of a foreign subsidiary when there is sufficient evidence that those earnings will be undistributed indefinitely. A footnote is needed declaring the intention to reinvest the earnings indefinitely and the cumulative amount of the undistributed profits. When there is a change in circumstances and earnings will be remitted back to the U.S. Parent, tax allocation is required.