Tax Bill to Introduce New Complexities for Companies, With Little Time to Process Them

By:
Chris Gaetano
Published Date:
Dec 18, 2017
Stress

With House and Senate Republicans having developed a compromise bill for tax reform, the Wall Street Journal reports that many of the same companies the plan is meant to benefit are scrambling to figure out how it will affect them with little time to do so. The legislation will require them to do things like estimate new tax liabilities, particularly as they relate to foreign tax credits if they have an international presence. They'll also need to do things like recalculate the value of any deferred tax items at the new rates, like future tax deductions for past losses, and record offsets to reflect new expectations. 

Outside bottom line dollars and cents issues, there will also be more reporting work. U.S. GAAP requires that companies reflect the impact of new tax provisions in the quarter they are signed, said the Journal. Since the president said he wants to sign the bill into law by Christmas, this means that companies will need to do things like assess the material impact of the changes and work them into their disclosures to investors. Companies that work on a calendar year schedule will have no more than 60 days past the new year to actually do this, which could stress out finance departments across the country. 

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