Q&A   |   January 2019
 

Tax reform, Supplement to KPMG's Handbook, Accounting for income taxes

KPMG’s latest tax reform Q&As address the effects of proposed IRS regulations and GILTI earned in 2018 by fiscal year-end CFCs. The new guidance provides our views on accruing 2018 taxes on the GILTI earned by fiscal year-end CFCs and expands our guidance about how proposed regulations affect the recognition and measurement of benefits related to tax positions with uncertainty. 

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:

  • How companies should consider the effects of proposed IRS regulations when evaluating the recognition and measurement of income tax benefits; and
  • an approach for accruing taxes on GILTI (global intangible low-taxed income) earned in 2018 by fiscal year-end CFCs (controlled foreign corporations). 

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 January 23, 2019) supersede the last edition published on January 16, 2019

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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