While the impact of the Tax Cuts and Jobs Act’s corporate rate reductions and other changes won’t be felt, for the most part, until 2018 and beyond, there is a very significant financial accounting which must be recorded in the financial statements of calendar year end C Corporations at December 31, 2017. Per ASC Topic 740, changes to applicable tax law and rates should be accounted for in the period in which the changes are enacted, which, in the United States, would mean when a bill is signed by the President. This is the case even if the impact of the changes won’t occur until a future tax year. Accordingly, entities need to assess the impact of this legislation on their federal and state income tax account balances and record the impact in this year’s financial statements. This could result in significant adjustments to the recorded amounts of deferred tax assets and liabilities and valuation allowances, and will result in 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. In this course, we’ll review the major provisions of the new law which will impact C corporations and review how applying these provisions will impact previously recorded amounts. We’ll also review SAB 118, the recently released guidance from the SEC, which addresses the accounting for these impacts as well as the status of recent efforts by the FASB to address certain accounting issues raised by this new legislation.
- Guidance in ASC Topic 740 related to accounting for changes in tax laws and rates
- Accounting for the major provisions of the Tax Cuts and Jobs Act which impact C Corporations
- Recent guidance from the SEC and FASB on applying Topic 740
- Review major features of the Tax Cuts and Job Acts which impact C corporations
- Review how to account for the impact of applying the new law on income tax related accounts
- Review the status and impact of recent and proposed accounting guidance on the accounting for the impact of the new legislation