The Financial Accounting Standards Board (FASB) will discuss the Tax Cuts and Jobs Act (P.L. 115-97) at its January 10 meeting. Since enactment of the tax law, questions have arisen about its impact on 2017 financial statements.
Under Accounting Standards Codification Topic 740, Income Taxes (ASC 740), businesses generally adjust the value of deferred tax assets and liabilities upon enactment of a change to the tax code. President Trump signed the Tax Cuts and Jobs Act on December 22, 2017.
Several professional and trade groups have urged the FASB in recent weeks to address how the tax law affects 2017 financial statements. One key impact, among others, is the deemed repatriation tax.
On its website, the FASB announced that its staff will update the Board on various implementation issues related to the Tax Cuts and Jobs Act. These include whether to discount the tax liability on the deemed repatriation, whether to discount alternative minimum tax credits (AMT) that become refundable, accounting for the base erosion anti-abuse tax, accounting for global intangible low-taxed income.
FASB staff will also update the Board on the use of Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, by private companies and not-for-profit entities. Bulletin No. 118 discusses application of U.S. GAAP when preparing an initial accounting of the income tax effects of the Tax Cuts and Jobs Act. The SEC released Bulletin No. 118 in last month.
By George L. Yaksick, Jr., Wolters Kluwer News Staff