Earnings and Profits (EFASB ASC Topic 740, Income Taxes, primarily aims to provide guidance on accounting for income taxes in financial statements. It's objectives include recognition of current and deferred tax liabilities and assets, measurement of current and deferred tax liabilities and assets at the appropriate tax rates, financial statement information for income tax expense or benefits and disclosure of income tax information in financial statements. Earnings and profit is a concept used in tax law to determine the amount of taxable distributions a corporation can make to its shareholders without those distributions considered a return of capital