Untitled Document

August 22, 2013

In brief

As part of our continued effort in assisting organizations as they navigate today's tax accounting issues, we have assembled a compilation of our Tax Accounting Services publications released over the first half of calendar year 2013.  This compilation represents the first of such summaries which we will release on a periodic basis.  We include links to the relevant documents and a brief summary of each topic.

For questions that arise related to matters within this compilation, for a comprehensive discussion of tax accounting issues affecting businesses today, or for general tax accounting questions, please contact your local PwC team, the Tax Accounting Services members listed at the end of this document, or the primary authors of the particular publication.

In detail

July 2013

Revised exposure draft on leases may have significant tax accounting, state tax, and systems implications

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued a revised exposure draft on leases (the Exposure Draft). 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.

June 2013

FASB ratifies consensus on netting unrecognized tax benefits against loss or other tax carryforward assets

The FASB ratified the accounting guidance proposed by the Emerging Issues Task Force (EITF) consensus for 
Issue 13-C, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.

Under the new standard (Auditing Standards Update No. 2013-11), UTBs will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by the UTBs.

Global Tax Accounting Services Newsletter (January to March 2013)

In this release, we discuss a variety of accounting and reporting developments and the related tax accounting considerations. We also draw your attention to some significant tax law and tax rate changes during the quarter ended March 31, 2013.

This issue's Tax Accounting Refresher walks through some of the key considerations and complexities in accounting for income taxes during interim periods under both International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (US GAAP).

May 2013

UK subsidiaries of US MNCs: New UK GAAP or IFRS?

Statutory financial reporting of UK subsidiaries of US MNCs will soon be affected by forthcoming changes to UK GAAP. These changes will not only impact UK accounting but will also have a knock-on effect on tax reporting and the timing of cash tax payments. As part of the changes, there are accounting choices to be made which could also impact cash taxes.

Tax accounting implications of new French wage tax credit

France enacted legislation in December 2012 to encourage investment and create jobs. The legislation grants companies a tax credit for qualifying salaries. The credit is equal to 4% of salaries paid for financial year 2013 and increases to 6% for financial year 2014.

Under French GAAP there is a choice to account for the credit either as a component of pre-tax income or as a component of income tax expense.

March 2013

Tax considerations relating to fair value accounting

To assist organizations in identifying and managing the tax considerations associated with fair value accounting, PwC has refreshed our Fair Value Accounting: Tax Considerations publication (originally released in December 2008).

Global Tax Accounting Services Newsletter (October to 
December 2012)

In this release, we discuss a variety of accounting and reporting developments and the related tax accounting considerations. We also draw your attention to some significant tax law and tax rate changes during the quarter ended December 31, 2012.

This issue's Tax Accounting Refresher walks through some of the key considerations and complexities associated with outside basis differences under both IFRS and US GAAP.

February 2013

FASB issues exposure draft proposing netting of unrecognized tax benefit when a net operating loss carryforward or tax credit carryforward exists.

On February 21, 2013, the FASB released an exposure draft, "Presentation of a Liability for an Unrecognized Tax Benefit When a Net Operating Loss Carryforward or Tax Credit Carryforward Exists." This exposure draft was subsequently ratified in June 2013. To access the Tax Accounting NewsAlert on the new standard, see the June 2013 section above or click here.

Tax accounting implications of new Colombian tax legislation

In December 2012, Colombia enacted legislation that reduced, effective January 1, 2013, the regular corporate income tax rate and introduced a new 'equality tax' (CREE is the Spanish acronym), which functions in addition to the regular income tax. The regular corporate income tax rate decreased from 33% in 2012 to 25% in 2013. The rate for the new CREE tax was set at 9% (which is scheduled to reduce to 8% in 2016 and thereafter).

Financial Accounting Foundation conducting review of accounting for income taxes

The Financial Accounting Foundation (FAF) announced that FASB Statement No. 109, Accounting for Income Taxes (FAS 109) (codified in Accounting Standards Codification (ASC) Topic 740, Income Taxes) will be the next standard for which it will conduct a post-implementation review (PIR). Although the FAF does not set standards and it does not seek to influence the outcome of the standard-setting process, the observations and findings of the PIR could impact the future direction of accounting for income taxes.

Key tax accounting considerations relating to recent Latin American tax law reforms

In the final months of 2012, Mexico, Colombia, Nicaragua, and the Dominican Republic all enacted tax reform packages that included income tax rate changes along with a variety of other tax reforms. Additionally, Costa Rica repealed certain withholding tax laws in December 2012. Under IFRS and US GAAP, many companies will need to analyze their tax provision calculations and reflect any corresponding impacts from these newly enacted laws in their 2012 financial statements.

January 2013

Tax accounting implications of new Mexican tax legislation

In December 2012, Mexico passed legislation that delays previously enacted corporate tax rate reductions which would have reduced the corporate tax rate to 29% in 2013 and 28% in 2014. However, subsequently enacted legislation maintains the 30% corporate tax rate through the end of 2013 with additional reductions effective in 2014 and 2015.

The takeaway

To view a comprehensive library of our tax accounting thought leadership check out:

www.pwc.com/us/en/tax-accounting-services/newsletters/tax-accounting/index.jhtml

Additionally, the PwC Guides to Accounting, including  Accounting for Income Taxes, are available through CFOdirect and Comperio.

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Let's talk


For questions that arise related to matters within this compilation, please contact your local PwC team, the Tax Accounting Services members listed below, or the primary authors of the particular publication.

Market

Leader

Phone

Email

Global Tax Accounting Services Leader

Ken Kuykendall

(312) 298-2546

o.k.kuykendall@us.pwc.com

Greater Atlanta

Ben Stanga

(615) 503-2577

ben.stanga@us.pwc.com

Northern California - San Jose

Ty Kanaaneh

(408) 817-5729

ty.h.kanaaneh@us.pwc.com

Northern California - San Francisco

Adan Martinez

(415) 498-6154

adan.martinez@us.pwc.com

Southern California

Darrell Poplock

(213) 356-6158

darrell.poplock@us.pwc.com

Carolinas

Tamara Williams

(704) 344-4146

tamara.williams@us.pwc.com

Greater Chicago

Rick Levin

(312) 298-3539

richard.c.levin@us.pwc.com

Florida

Rafael Garcia

(305) 375-6237

rafael.h.garcia@us.pwc.com

Greater Houston

Maria Collman

(713) 356-5091

maria.t.collman@us.pwc.com

Lake Erie

Mike Tomera

(412) 355-6095

michael.tomera@us.pwc.com

Greater Michigan

Amy Solek

(313) 394-6767

amy.j.solek@us.pwc.com

Minneapolis

Chad Berge

(612) 596-4471

chad.berge@us.pwc.com

Missouri

Brian Sprick

(314) 206-8509

brian.sprick@us.pwc.com

Northeast

David Wiseman

(617) 530-7274

david.wiseman@us.pwc.com

New York Metro

Gayle Kraden

(646) 471-3263

gayle.kraden@us.pwc.com

Ohio, Kentucky, Indiana

Dan Staley

(513) 723-4727

daniel.j.staley@us.pwc.com

Pacific Northwest

Suzanne Greer

(206) 398-3339

suzanne.greer@us.pwc.com

Philadelphia

Diane Place

(267) 330-6205

diane.place@us.pwc.com

Rockies

Mike Manwaring

(720) 931-7411

michael.manwaring@us.pwc.com

North Texas

Steve Schoonmaker

(512) 708–5492

steve.schoonmaker@us.pwc.com

Washington Metro

Jamie Grow

(703) 918–3458

james.b.grow@us.pwc.com