SEC Commission Staff Provides Disclosure Guidance for Accounting Impacts of the Tax Cuts and Jobs Act

December 26, 2017

The U.S. Securities and Exchange Commission published staff guidance regarding public company disclosure of the accounting impacts of the Tax Cuts and Jobs Act (the Act).

Highlights

  • New Staff Accounting Bulletin No. 118 guidance calls for a company to disclose a provisional amount for the impact of the Act in cases where it has not finished its analysis by the time the relevant financial statements are due but is able to make a reasonable estimate.
  • If a company is unable to make a reasonable estimate, it would report provisional amounts in the first reporting period in which it is able to make a reasonable estimate.
  • The staff expects companies to complete their analysis by December 22, 2018.
  • New Compliance and Disclosure Interpretation 110.02 expresses the staff’s view that the re-measurement of a deferred tax asset as a result of the Act does not trigger a disclosure obligation under Item 2.06 of Form 8-K.

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