This excerpt taken from the MOFG 10-K filed Apr 15, 2008.
The Company files a consolidated federal income tax return. For state purposes, the Bank files a franchise return and the remaining entities file a consolidated income tax return.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts and of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The FASB issued Interpretation No. 48 Accounting for Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109 in June 2006. As a result of the implementation of FIN 48 on January 1, 2007, the Company did not recognize any increase or decrease for unrecognized tax benefits. There were no unrecognized tax benefits or any interest or penalties on any unrecognized tax benefits as of January 1, 2007 and December 31, 2007.