You’ve probably seen the large impacts that many publicly traded entities have announced related to the accounting for the Tax Cuts and Jobs Act. It’s important to remember that tax reform’s impact on financial statements isn’t just a large or publicly traded company issue. All corporations need to record the impact of the change in the tax law, no matter how big or small you are or whether you are public or private.
Given that all C corporations will need to account for the changes regarding income tax accounting in their 2017 financial statements as a result of the Tax Cuts and Jobs Act, now is the time to understand what this impact will be. Accounting for the Act will have major impact on your income statements and you’ll want to make sure you are fully informed and your stakeholders are prepared for the effects they may feel in 2018 and beyond.
One major change that comes with the Tax Cuts and Jobs Act that you and your stakeholders should be prepared for is that your recorded deferred tax assets and liabilities will need to be remeasured to reflect the new, reduced federal income tax rate. This revaluation may result in previously recorded valuation allowances against deferred tax assets being no longer necessary. Furthermore, limitations on the deductibility of interest is especially important as this may impact major decisions around how to finance operations. And If you operate internationally, big changes are in store for you as a result of the Act. Specifically, around the recognition of the “toll tax” on previously unrepatriated foreign earnings, with the impact of these adjustments being recording in the current period tax provision from continuing operations. For some the impact has been billions of dollars. And don’t forget, these adjustments get recorded in your income statement as part of income tax expense from current operations. Finally, the FASB and SEC have issued recent guidance on how to account for the impact of the Act but several implementation issues still remain unresolved. It’s clear that, for many entities, accounting for the impact of the Act is an activity that may last throughout the entire year.
Surgent, remaining true to the promise of offering the very latest educational information, regulatory changes, and practical issues related to tax, is offering a webinar, How Tax Reform Impacts Financial Statements (AIT2), to review:
• Major features of the Tax Cuts and Job Acts which impact C corporations
• How to account for the impact of applying the Tax Cuts and Jobs Act on income tax related accounts
• The status and impact of recent and proposed accounting guidance on the accounting for the impact of the Tax Cuts and Jobs Act
Join Rich Daisley, CPA, Senior Director, Accounting and Financial Reporting Content for Surgent CPE as he discusses tax reform’s impact on financial statements and other financial reporting issues related to the Tax Cuts and Jobs Act.
Rich Daisley, CPA, is Senior Director, Accounting and Financial Reporting Content for Surgent CPE. With over 26 years of experience in the accounting and auditing field, Mr. Daisley has worked in both the client service setting, mainly for PwC’s Capital Markets and Accounting Advisory Services Group and for PECO Energy’s Merger and Acquisition Group, and in the internal capacity setting as a course developer and facilitator creating leading training courses for PwC and Surgent. Rich lives in suburban Philadelphia.