A corporate taxpayer has anIncome tex Expenserecorded on its preliminary financi

A corporate taxpayer has anIncome tex Expenserecorded on its preliminary financial statements of $13000000. The only difference between the preliminary financial accounting tax expense and the actual tax liability is a tax position not yet reflected in the financial statements that will result in a tax savings this year of $1000000. The company believes that if it were audited on that tax position there is a 40% chance that the IRS would disallow the entire amount. There is a 60% probability however that the IRS would not disallow any portion of the amount. How should that $1000000 be reflected in the financial accounting income statement?