Calendar year 2013 has seen considerable activity across the global legislative and regulatory landscapes. There have been changes to tax laws in several key territories with certain legislative trends having a significant impact on income tax accounting. These developments, combined with an environment of economic uncertainty, have added to the challenges in accounting for income taxes. Topics covered in this publication are as follows:
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Users of financial statements continue to emphasize the importance of informative, decision useful dislosures. Numerous income tax accounting matters require the use of estimates, judgments, and other subjective information. Clarifying disclosures can enable users to gain a better understanding of the reporting entity's income tax environment. Read the full story.
The Financial Accounting Foundation (FAF) completed its post-implementation review (PIR) of Financial Accounting Standards Board (FASB) Statement No. 109, Accounting for Income Taxes (FAS 109). The FAF concluded that FAS 109 adequately achieved its intended purposes, although the complexity associated with accounting for income taxes has not been reduced. Additionally, the FAF concluded that FAS 109 generally provides investors with decision-useful information noting, however, that investors struggle to assess cash tax effects and find it difficult to understand the potential tax costs associated with foreign earnings considered to be indefinitely reinvested. The FAF further indicated that preparers have difficulty with 'intraperiod tax allocation,' accounting for intercompany transfers of assets, and indefinitely reinvested foreign earnings.
The FASB subsequently released its response to the FAF's report on FAS 109. The FASB indicated that it will follow-up on areas of concern noted in the report by seeking input from financial statement users, preparers, auditors, and others. Read the full story.
In this release we discuss a variety of accounting and regulatory updates. We also draw your attention to some significant tax law and tax rate changes during the quarter ended September 30, 2013, as well as a tax accounting refresher detailing key tax accounting considerations for mergers and acquisition transactions. Read the full story.
In this publication, we discuss how the tax function is often overlooked as an area for improvement, unlike more obvious choices such as supply chain or business services. A detailed assessment of a company's tax group can reveal untapped opportunities where changes in technology, process, people, and data can lead to benefits for the broader business. Read the full story.
To incentivize foreign direct investment and economic development, governments have provided relief from income taxation in increasingly creative ways. In addition to offering the traditional full tax holiday for a specified time period, governments now also provide reduced tax rates, exemptions, and similar special deductions. Some of these benefits are generally available to any enterprise operating in the jurisdiction while others require application or qualification procedures.
Determining whether these government tax incentives are tax holidays for accounting purposes, or whether they should receive some other income tax accounting treatment, can be a challenge. In some cases, the incentives may represent government grants or subsidies that fall outside of income tax accounting.
This Tax Accounting Insight provides a comparison of the potentially relevant accounting models and highlights some of the factors to consider in determining which model applies. Read the full story.
In this release, we discuss a variety of accounting and reporting developments and their related tax accounting considerations (e.g., revised exposure draft on leases, tax transparency and country-by-country reporting). We also draw your attention to significant tax law and tax rate changes during the quarter ended June 30, 2013.
This issue's tax accounting refresher walks through some of the key considerations and complexities in accounting for tax incentives. Read the full story.
Business expansion and transformation resulting from technological advances has increased the competition between governments in their efforts to attract research investments through the use of tax subsidies. The historic governmental trend of providing incentives for front-end expenditures has evolved toward using income-based incentives such as patent box regimes. Depending on the terms and operation of each specific incentive, varying financial reporting impacts may occur.
It's more important than ever for companies to understand and regularly assess financial accounting treatment for credits and incentives in order to ensure timely identification, reporting, and disclosure of such benefits. Financial reporting considerations are being given increased attention by policymakers in the design of tax law incentives, which may become apparent in the context of future US tax reform proposals. Read the full story.
The FASB and the International Accounting Standards Board (IASB) issued a revised exposure draft on leases. The May 16 exposure draft attempts to address criticisms of the 2010 exposure draft while meeting the key objective of recognizing leased assets and liabilities on the balance sheet. Read the full story.
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For questions about income tax accounting matters, please contact your local PwC team, our Tax Accounting Services leaders listed below, or the primary authors of each publication.
Market |
Leader |
Phone |
|
Global Tax Accounting Services Leader |
Ken Kuykendall |
(312) 298-2546 |
|
Atlanta |
Ben Stanga |
(615) 503-2577 |
|
N. California-San Jose |
Ty Kanaaneh |
(408) 817-5729 |
|
N. California-San Francisco |
Adan Martinez |
(415) 498-6154 |
|
Southern California |
Darrell Poplock |
(213) 356-6158 |
|
Carolinas |
Tamara Williams |
(704) 344-4146 |
|
Chicago |
Rick Levin |
(312) 298-3539 |
|
Florida |
Rafael Garcia |
(305) 375-6237 |
|
Houston |
Maria Collman |
(713) 356-5091 |
|
Lake Erie |
Mike Tomera |
(412) 355-6095 |
|
Michigan |
Amy Solek |
(313) 394-6767 |
|
Minneapolis |
Chad Berge |
(612) 596-4471 |
|
Missouri |
Brian Sprick |
(314) 206-8509 |
|
Northeast |
David Wiseman |
(617) 530-7274 |
|
New York Metro |
Allen AhKao |
(973) 236-5730 |
|
New York Metro |
Gayle Kraden |
(646) 471-3263 |
|
New York Metro |
Gary Pogharian |
(973) 236-5696 |
|
New York Metro |
John Triolo |
(646) 471-5536 |
|
Ohio, Kentucky, Indiana |
Dan Staley |
(513) 723-4727 |
|
Pacific Northwest |
Suzanne Greer |
(206) 398-3339 |
|
Philadelphia |
Diane Place |
(267) 330-6205 |
|
Rockies |
Mike Manwaring |
(720) 931-7411 |
|
North Texas |
Steve Schoonmaker |
(512) 708-5492 |
|
Washington Metro |
Jamie Grow |
(703) 918-3458 |