Identify and explain the steps in U.S. GAAP’s approach to accounting for uncertain tax positions

What will be an ideal response?

Step 1 – Recognition: the company will evaluate all evidence and determine if it is more likely than not that the tax position will be sustained.
Step 2 – Measurement: the company measures the amount to be recognized based on cumulative probability computations, without considering time value of money in the computation.
See Topic 740, which followed FASB FIN No. 48.