AccountingLink

    Income taxes

    4 October 2018

    Quarterly tax developments - September 2018
    Our September 2018 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes certain enacted tax legislation, as well as regulatory developments, legislative proposals and other items, through 26 September 2018, to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.

    4 October 2018

    Technical Line - A closer look at accounting for the effects of the Tax Cuts and Jobs Act
    We have updated our Technical Line to provide additional accounting and disclosure considerations related to the end of the SAB 118 measurement period, including how to address regulations the US Treasury Department may issue after the measurement period ends. We have also updated the US Treasury Department and IRS notices section of the publication to include additional considerations for proposed regulations related to the Act’s GILTI tax provisions.

    27 June 2018

    Quarterly tax developments - June 2018
    Our June 2018 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes certain enacted tax legislation, as well as regulatory developments, legislative proposals and other items, through 20 June 2018, to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.

    29 March 2018

    Quarterly tax developments - March 2018
    Our March 2018 edition of Quarterly Tax Developments has been updated to include certain enacted tax law changes from 15 March 2018 through 31 March 2018 and developments after 31 March 2018 that relate to the US tax reform law.

    15 February 2018

    To the Point - FASB issues guidance on reclassification from OCI of tax effects related to tax reform
    The FASB issued an Accounting Standards Update that will permit entities to reclassify tax effects stranded in accumulated other comprehensive income (OCI) as a result of tax reform to retained earnings. The final guidance gives entities the option to reclassify these amounts, but requires new disclosures, regardless of whether they elect to do so. The guidance is effective for fiscal years beginning after 15 December 2018, and interim periods within those fiscal years. Early adoption in any period is permitted.

    7 February 2018

    To the Point - FASB moves ahead with guidance on reclassification of tax effects stranded in OCI by tax reform
    The FASB decided to finalize guidance that would permit entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings and directed the staff to draft a final Accounting Standards Update. The FASB decided to give entities the options to (1) reclassify these amounts rather than require reclassification and (2) apply the guidance retrospectively or in the period of adoption.

    2 February 2018

    Comment letter - Reclassification of stranded tax effects
    In our comment letter, we said the FASB’s proposed guidance appropriately addresses the concerns raised by stakeholders regarding the effects of US tax reform on financial reporting. However, we questioned whether the proposed guidance would be beneficial or operational for all entities and recommended that the Board give companies the option to apply the guidance and/or exclude certain tax effects recorded in other comprehensive income from the scope of any final standard. We also supported the addition of a broader project on backwards tracing to the FASB’s standard-setting agenda.

    4 January 2018

    Technical Line - SEC staff provides guidance on accounting for the effects of US tax reform
    The SEC staff issued Staff Accounting Bulletin (SAB) 118 and Compliance and Disclosure Interpretation 110.02 addressing US tax reform, which was enacted on 22 December 2017. This SAB clarifies how companies that haven’t completed their accounting for the effects of the most significant change in US tax legislation in the last 30 years by their financial reporting deadlines should apply ASC 740. Under the SAB, a company can report provisional amounts based on reasonable estimates for items for which the accounting is incomplete. A company that cannot make a reasonable estimate of an item for which the accounting is incomplete should not account for that effect until it can make such an estimate. Those amounts will be subject to adjustment during a measurement period of up to one year.

    21 December 2017

    Quarterly tax developments - December 2017
    Our December 2017 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes certain enacted tax legislation, as well as regulatory developments, legislative proposals and other items, through 14 December 2017, to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.

    3 November 2017

    Financial Reporting Developments - Income taxes
    We have updated our FRD publication on income taxes primarily in response to recent standard setting that affects the accounting for intercompany transactions and available-for-sale securities, among other things. Refer to Appendix D of the publication for a summary of the updates.

    9 October 2017

    Quarterly tax developments - September 2017
    Our September 2017 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes certain enacted tax legislation, as well as regulatory developments, legislative proposals and other items, through 28 September 2017 to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.

    5 October 2017

    Eyes on US tax reform: A guide to income tax accounting considerations
    Our publication provides tax accounting considerations and references to EY interpretive guidance to help companies prepare for changes in accounting that could result from US tax reform. The tax plan now under consideration by Congress would reduce the corporate income tax rate to 20%, allow immediate capital expensing, broaden the tax base and create a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings. While ASC 740, Income Taxes, requires changes in tax law to be accounted for in the period of enactment (i.e., when the President signs legislation), companies need to understand the tax proposals under consideration so they can evaluate and prepare for changes in their financial reporting.

    13 July 2017

    Technical Line - How the new revenue standard may affect a company’s income tax accounting
    As companies prepare to adopt the new revenue recognition standard, they must consider the potential income tax accounting implications. Adoption of the standard may create new temporary differences or require the remeasurement of existing ones, and companies may need to revise their processes and data collection tools to capture any new ones. Tax professionals should be actively involved in implementation discussions to make sure all implications are considered.

    28 June 2017

    Quarterly tax developments - June 2017
    Our June 2017 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes certain enacted tax legislation, as well as regulatory developments, legislative proposals and other items, through 15 June 2017 to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.

    30 March 2017

    Quarterly tax developments - March 2017
    Our March 2017 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes certain enacted tax legislation, as well as regulatory developments, legislative proposals and other items, through 15 March 2017 to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.

    30 March 2017

    To the Point - Brexit withdrawal notification doesn’t trigger immediate tax accounting consequences
    The United Kingdom (UK) government’s formal notification of its intent to withdraw from the European Union (EU) raised the question of whether that action constituted a change in tax law for income tax accounting purposes. We believe that the withdrawal notification does not trigger immediate income tax accounting consequences. Companies should instead account for changes to their income tax accounts when a new tax law or treaty is enacted or the UK actually withdraws from the EU, whichever is earlier. Affected companies should disclose information about the status of the UK withdrawal efforts and the potential income tax effects of its eventual withdrawal.

    21 December 2016

    Quarterly tax developments - December 2016
    Our December 2016 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes enacted tax legislation, as well as regulatory developments, legislative proposals and other items, through 15 December 2016 to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.

    27 October 2016

    To the Point - FASB limits deferral of income tax effects of intercompany transfers to those involving inventory
    The FASB issued final guidance that will require companies to account for the income tax effects of intercompany transfers of assets other than inventory (e.g., intangible assets) when the transfer occurs. The guidance is effective for public business entities in annual periods beginning after 15 December 2017, and for all other entities in annual periods beginning after 15 December 2018. Early adoption is permitted as of the beginning of an annual period (i.e., early adoption is permitted only in the first interim period).

    6 October 2016

    To the Point - Companies should consider possible changes to the tax treatment of certain related party debt instruments
    Companies (foreign or domestic) that issue debt to related parties (including intercompany debt) may be affected by regulations proposed to change the US federal income tax treatment of this type of debt. Companies should begin identifying arrangements that could be affected. Under the proposal, certain related party debt could be treated as equity for US federal income tax purposes. It is not clear whether the regulations will be issued in their proposed form or whether they will be changed significantly. The issues are complex, and the regulations could become final soon.

    30 September 2016

    Comment Letter - FASB proposed changes to disclosure requirement for income taxes
    In our comment letter, we supported the FASB’s effort to improve the effectiveness of income tax disclosures, particularly incorporating disclosures required by the Securities and Exchange Commission into US GAAP. However, we asked the FASB to provide more details about the input received from users on expanding the disclosure requirements as we believe that would help other constituents understand how the proposal meets user needs. In addition, we expressed concerns about the proposed requirements to disclose agreements with a government and the future effects of tax law changes, and we recommended that the Board clarify certain aspects of the proposed requirements to promote consistency and make the disclosures as useful as possible.

    28 September 2016

    Quarterly tax developments - September 2016
    Our September 2016 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes enacted and effective tax legislation, as well as regulatory developments, legislative proposals and other items, through 9 September 2016 (except as noted) to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.