The SEC recently issued Accounting Release No. 102 requiring that deferred taxes arising out of installment sales be classified as a current liability. This ruling is in conflict with the overwhelmingly predominant practice of the retail industry and—in the viewpoint of the National Retail Merchants Association—will result in a distortion in the net working capital position of retailers.

It is hoped that the Accounting Principles Board of the American Institute of Certified Public Accountants will conclude that deferred taxes should properly be classified as a non-current liability and that the SEC will reconsider its decision.