FASB addressed financial reporting issues related to P.L. 115-97, the Tax Cuts and Jobs Act, in four staff Q&As posted to its website Monday.
The Q&As address:
- Whether to discount the tax liability on the deemed repatriation. FASB’s staff believes that the tax liability on the deemed repatriation of earnings should not be discounted.
- Whether to discount alternative minimum tax (AMT) credits that become refundable. FASB’s staff notes that GAAP prohibits discounting deferred taxes, and accordingly, any AMT credit carryforwards presented as a deferred tax asset would not be discounted.
- Accounting for the base-erosion anti-abuse tax. FASB’s staff believes that an entity that is subject to base-erosion anti-abuse tax should measure deferred tax assets and liabilities using the statutory tax rate under the regular tax system.
- Accounting for global intangible low-tax income. FASB’s staff believes that it is permissible for financial statement preparers to use one of two interpretations in this accounting. The staff notes that an entity must disclose its accounting policy related to global intangible low-tax income inclusions in accordance with GAAP.
FASB also issued a staff Q&A document on Jan. 11 that states that FASB’s staff would not object if private companies and not-for-profits voluntarily apply SEC Staff Accounting Bulletin No. 118.
— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is a JofA editorial director.