Q&A   |   November 2018
 

Accounting for tax reform

Filed under: Expenses, Incomes taxes, SEC matters, Management issues

KPMG’s latest tax reform Q&As address the end of the SAB 118 measurement period and grandfathered employee compensation arrangements. The guidance clarifies how to interpret the end of the SAB 118 measurement period for non-calendar year-end companies and how companies may determine whether employee compensation arrangements are grandfathered. 

Applicability

ASU 2018-02

  • All companies affected by US tax reform

Relevant dates

  • December 22, 2017 – Enactment date

Latest developments

  • KPMG’s latest tax reform Q&As address considerations for the end of the SAB 118 mesurment period and grandfathered employee compensation arrangements.

Key impacts

  • H.R. 1, originally known as the Tax Cuts and Jobs Act, was enacted on December 22, 2017 and has significantly impacted companies’ accounting for and reporting of income taxes, and the related processes and controls
  • Because ASC 740 requires companies to recognize the effect of tax law changes in the period of enactment, the effects generally were recognized in companies’ December 2017 financial statements
  • The SEC staff issued SAB 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which allows registrants to record provisional amounts during a ‘measurement period’. This is similar to the measurement period used when accounting for business combinations (ASC 805)
  • These Q&As (published November 30) supersede the last edition published on September 7

Webcast

Report contents

  • Overview and SEC relief
  • Corporate rate
  • Tax on mandatory deemed repatriation
  • Other international provisions
  • Other matters
  • Valuation allowance assessment
  • Interim period considerations

Related content

Main contributors

Kayreen Handley

Kayreen Handley

Partner, DPP, KPMG (US)

+1 212-954-8288
Angie Storm

Angie Storm

Partner, Dept. of Professional Practice, KPMG (US)

+1 212-909-5488
Lauren Sloan

Lauren Sloan

Partner, Audit, KPMG (US)

+1 212-954-2860

 

 

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