Accounting for Income Taxes Hot Topics Archive

Accounting for Income Taxes Hot Topics highlights certain recent tax and accounting developments that may have accounting for income tax (ASC 740) implications.

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March 25, 2013 - March 2013

• Accounting Developments
  - Emerging Issues Task Force (EITF) reaches consensus-for-exposure on Issue 13-B, “Accounting for Investments in Tax Credits”
  - EITF releases exposure draft regarding the Presentation of an Unrecognized Tax Benefit When a Net Operating Loss or Tax Credit Carryforward Exists
  - Private Company Council did not formally add accounting for uncertain tax positions to its agenda
  - Financial Accounting Foundation (FAF) to conduct Post-Implementation Review of FASB standard on Accounting for Income Taxes
• Federal
  - United States Court of Federal Claims’ summary judgment on depreciation allocable to exempt income
  - The American Taxpayer Relief Act of 2012 signed into law on January 2, 2013
• International
  - France: Tax credit for competitiveness and employment
• Multistate
  - California Court of Appeal reverses trial court in Microsoft’s favor and applies cost of performance sourcing to royalties
• Did You Know?
  - Exceptions to deferred tax asset (DTA) and deferred tax liability (DTL) recognition for corporate joint ventures
  - Financial Reporting for Taxes 2013 Training

December 19, 2012 - December 2012

• Accounting Developments
  - 2012 AICPA National Conference on Current SEC and PCAOB Developments
  - Income tax accounting implications of Hurricane Sandy
• Multistate
  - California voters approve tax ballot measures: Mandatory single sales factor apportionment for most multistate taxpayers
  - State Amnesty Programs: Kentucky and New Jersey
• Controversy
  - Tangible property regulation compliance delayed until 2014

September 24, 2012 - September 2012

• Accounting Developments
  - FASB proposes new disclosures for reclassification adjustments out of AOCI
• International
  - UK corporate tax rate reduction
  - France: Accounting for the newly enacted 3% distribution surtax
• Multistate
  - Texas court rules certain real property service costs are deductible COGS for Texas franchise tax
  - New law in Massachusetts postpones combined reporting “FAS 109” deduction for one more year
• Did You Know?
  - First in a series: Accounting for share-based compensation when the recipient is employed by a subsidiary but the shares are of the parent
  - Financial Reporting for Taxes 2012 Training

June 25, 2012 - June 2012

• International
  - Dual tax rate jurisdictions: Determination of an applicable tax rate
  - India’s Finance Act 2012 and the impact of certain retrospective provisions
• Multistate
  - State Amnesty Program
  - Arizona expands tax credits and increases net operating loss carryforward period for corporations
  - California officially adopts regulation on market sourcing for sales of other than tangible personal property
  - Nebraska adds new defined corporate income tax terms and adopts market sourcing for sales other than sales of tangible personal property
• Controversy
  - Supreme Court affirmed Home Concrete
• Did You Know?
  - Application of ASC 740-20-45-11(g) to noncontrolling interest transactions
  - Potential limitation on the ability to deduct foreign tax credits

March 26, 2012 - March 2012

• Accounting Developments
  - Presentation of Other Comprehensive Income
• Federal
  - Guidance issued for taxpayers to comply with tangible property temporary regulations
• International
  - Accounting for income tax considerations for IRC Section 952(c) Subpart F income recapture
  - Accounting for changes introduced by recently issued regulations: IRC Sections 909 and 901
• Multistate
  - Michigan enacts changes to Corporate Income Tax
  - Illinois law change
• Controversy
  - Domestic production activity guidance issued
• Did You Know?
  - Elections to change tax status cannot be considered until actually filed

December 21, 2011 - December 2011

• Accounting Developments
  - 2011 AICPA National Conference on SEC and PCAOB Developments
• Federal
  - Income tax accounting for discontinued operations
• International
  - Changes to net operating loss carryover rules: France, Hungary, Italy, Japan, and Spain
  - Subpart F and tax accounting for foreign investments: Expiring foreign provisions
  - Japan tax reform
• Controversy
  - The use of widely understood administrative practices and precedents
• Did You Know?
  - Accounting for deferred tax assets related to tax receivable agreements
  - Representative Camp releases draft bill rewriting the U.S. tax rules on foreign income of U.S. multinationals

September 26, 2011- September 2011

• Accounting Developments
  - Lease accounting update
• Federal
  - Guidance issued on the application of the economic substance doctrine
  - Final regulations on accounting methods following IRC Section 381(a) transactions
• International
  - UK Corporate Tax Rate Changes
• Multistate
  - District of Columbia’s 2012 Budget Support Act
  - Massachusetts law change
  - State Programs: Recently, both New Jersey and Ohio have implemented programs applicable to income taxes and nonincome taxes
• Controversy
  - Recent guidance: Schedule UTP updated FAQs
• Did You Know?
  - Income tax accounting for partnerships: Measuring deferred taxes (3rd in a series)
  - Update on safe harbor election for success-based fees incurred in connection with covered transactions

June 28, 2011 - June 2011

• Accounting Developments
  - SEC issues staff paper to address incorporation of international standards into U.S. reporting system
• Federal
  - Rev. Proc. 2011-35 – Establishing tax basis in the stock of a target corporation acquired in a “transferred basis transaction”
  - Rev. Proc. 2011-29 – Safe harbor election for allocating success-based fees between facilitative and non-facilitative activities
• International
  - Puerto Rico excise tax
  - Effect of Section 901(m) on the Section 338 election making process
  - Updated Form 8832 accommodates late classification elections
• Multistate
  - New Jersey law change
  - Michigan enacts Corporate Income Tax and eliminates three-factor apportionment election
  - State programs
• Controversy
  - Refund claim allows IRS to recalculate tax liability for all years necessary to determine whether there was an overpayment
• Did You Know?
  - SEC comments – Income tax disclosures related to indefinitely reinvested foreign earnings
  - Income tax accounting for partnerships – Effective tax rate consequences of noncontrolling interests (second in a series)

March 28, 2011 - March 2011

• Accounting Developments
  - Roadmap to Accounting for Income Taxes
• Federal
  - New guidance released on federal tax accounting for gift cards
• International
  - Puerto Rico excise tax
• Multistate
  - Arizona tax law change
  - Illinois tax law change
  - Wisconsin administrative practice
• Controversy
  - Tax Controversy Update: 2011 Offshore Voluntary Disclosure Program
• Did You Know?
  - Income tax accounting for partnerships: Determining the appropriate tax basis (first in a series)
  - Deloitte offers Financial Reporting for Taxes 2011 Training