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Tax Cuts and Jobs Act

Thomson Reuters Report Addresses Effects of Tax Cuts and Jobs Act on Public Company Disclosures

Dana Greenstein  

Dana Greenstein  

Thomson Reuters has released a Checkpoint special report to help public companies gain an understanding of the impact of the Tax Cuts and Jobs Act (TCJA) on their financial reporting and disclosure obligations.

On the same date that the TCJA was signed into law, separate divisions within the Securities and Exchange Commission (SEC) issued guidance to clarify the effect of the sweeping changes to the Internal Revenue Code on such obligations. Both Staff Accounting Bulletin (SAB) No. 118 and Exchange Act Form 8-K Compliance and Disclosure Interpretation (C&DI) 110.02 are intended to shed light on the application of United States generally accepted accounting principles (U.S. GAAP) to the accounting modifications resulting from the new tax reform legislation.

The report, Effects of the Tax Cuts and Jobs Act on Public Company Disclosures, discusses the SEC Staff guidance, including registrants’ accounting obligations when completing their assessment for certain tax effects of the TCJA and the disclosures that registrants are expected to provide concerning material financial reporting impacts of the TCJA for which the accounting is incomplete.

It also identifies considerations that public company reporting entities should be aware of as they assess the business impact of the TCJA, including those related to annual report disclosures on Form 10-K, proxy statement disclosures, and current report disclosures on Form 8-K. Toward this end, the report provides excerpts from actual SEC filings across industries to enable registrants to examine how other public companies are handling TCJA-related disclosures.

More specifically, the sample SEC filings reference: (1) Form 10-K disclosures pertaining to risk factors, Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and financial statement footnotes and non-GAAP financial measures; (2) proxy statement disclosures pertaining to Compensation Discussion and Analysis (CD&A) and other compensation provisions; and (3) Form 8-K disclosures pertaining to forward-looking statements, results of operations and financial condition, Regulation FD and other events.

“The TCJA’s quick enactment has meant that accounting for its far-reaching impact is still very much a work in progress for public companies,” said Salim Sunderji, managing director, Checkpoint, with the Thomson Reuters Tax & Accounting business. “We want to increase awareness and ease the information-gathering process for tax and accounting professionals who are entrusted to both comply with industry standards and to provide investors with quality information.”

The free report is available for download here.

Thomson Reuters Checkpoint tackles market disruption through integrated research, editorial insight, productivity tools, online learning, content marketing solutions and news updates along with intelligent links to related content and software. It is relied on by hundreds of thousands of tax and accounting professionals, and counts among its customers 97 of the Top 100 U.S. law firms, 99 of the Fortune 100 companies, and all of the top 100 U.S. CPA firms.

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