House Democrats Call on FASB to Require Country-by-Country Profit and Tax Disclosures

By:
Chris Gaetano
Published Date:
Jul 20, 2017
Globe on money

House Democrats, in a letter recently sent to FASB Chair Russell Golden, asked that the board require multinational companies to report more information on a country-by-country basis as part of an effort to combat offshore profit shifting. Specifically, they said that companies should have to disclose income, assets, number of employees and taxes paid on a country-by-country basis. They said that the limited availability of such data "poses a threat to investors, policymakers, and the general public," and noted that shareholder risk is increased when they cannot access complete information about a company's tax strategy, valuation and management approach. 

"These standards will implement critical safeguards and mitigate risk for investors and provide policymakers and the public with important data relevant to our national well-being," said the lawmakers. 

The letter was signed by Reps. Mark Pocan (D-Wisconsin), Lloyd Doggett (D-Texas), Sandy Levin (D-Michigan), Earl Blumenauer (D-Oregon), Judy Chu (D-California), Michael Capuano (D-Massachusetts), David Cicilline (D-Rhode Island), John Conyers (D-Michigan), Peter Fazio (D-Oregon), Keith Ellison (D-Michigan), Barbara Lee (D-California), Ted Lieu (D-California), Stephen Lynch (D-Massachusetts), Gwen Moore (D-Wisconsin), Jan Schakowsky (D-Illinois), and Raul Grijalva (D-Arizona). 

The FASB said it would think on the letter's ideas, and noted the work that was ongoing in the area of corporate disclosures. 

“We appreciate the input and interest from members of Congress on this important issue. Last year, the FASB issued proposed improvements to tax disclosures as part of a broader disclosure framework project.  We received approximately 50 comment letters in response to that proposal, and conducted extensive outreach including a roundtable earlier this year.  We will carefully consider the recommendations in the Congressional letter as we redeliberate all the input we received prior to determining next steps," said FASB spokesperson Christine Klimek. 

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