Income tax

Accounting for income taxes is a perpetual hot topic in the U.S. The overall accounting model for income taxes has been in place for many years, yet the accounting for income taxes continues to pose many challenges for preparers, users, and auditors.

Continued areas of focus/challenge

Among those challenges are:

  • tax accounting rules for valuation allowance,
  • intraperiod allocation,
  • interim periods,
  • business combinations, and
  • foreign operations.

The ever-changing landscape of income tax law requires analysis on a continuous basis across multiple jurisdictions. In addition to being complex, the relevant accounting standards contain many nuances, and applying the standards oftentimes involves significant judgments.

 

Point of view

Accounting for income taxes - A case for simplification

7/29/14 | Assurance services

It's time to hit the "reset" button and adopt targeted changes to simplify the income tax accounting standard, read our Point of view to find out more. Read more

  • Tax accounting insights
    FASB discusses income tax accounting for stock compensation

    9/12/14 | Tax accounting services

    During its meeting on September 10, 2014, the FASB preliminarily discussed whether to add income tax accounting for stock compensation to its Simplification agenda.

  • Key accounting method considerations for 2013 returns

    8/18/14 | Washington national tax services (WNTS)

    Key elections and accounting methods taxpayers should consider for 2013 returns.

  • Tax accounting insights
    FASB adds income tax accounting topics to its agenda

    8/18/14 | Tax accounting services

    FASB adds income tax accounting topics to its agenda (August 2014).

  • Tax accounting insights
    Tax accounting retrospective (January - June 2014)

    8/6/14 | Tax accounting services

    As part of our continued effort to help organizations navigate through the complexity of today's tax accounting issues, we've assembled a compilation of our Tax Accounting Services' publications released between January 2014 and June 2014.

  • Point of view
    Point of view: Accounting for income taxes - A case for simplification

    7/29/14 | Assurance services

    It's time to hit the "reset" button and adopt targeted changes to simplify the income tax accounting standard, read our Point of view to find out more.

  • Tax accounting insights
    Global Tax Accounting Services Newsletter (April– June 2014) - follow recent global accounting and reporting developments

    7/23/14 | Tax accounting services

    In this release we discuss a variety of global accounting, reporting and tax law developments in the quarter ended June 30, 2014.

  • Corporate Governance Series
    The Quarter close: Directors edition Q2 2014

    6/26/14 | Center for Board Governance

    The Q2 2014 edition focuses on five IPO reminders for boards, FASB's new guidance on discontinued operations, and the Venezuelan exchange rates.

  • Webcast
    PwC's quarterly tax accounting webcast - Q2 2014 – July 8, 2014

    Tax accounting services

    PwC invites you to join a panel of our Tax Accounting Services (TAS) specialists for a discussion of relevant tax accounting matters including the indefinite reinvestment assertion, the recently issued revenue standard, as well as regulatory and legislative development updates.

  • M&A snapshot
    Cross-border acquisitions - Accounting considerations relating to income taxes (M&A snapshot)

    5/12/14 | Assurance services

    In cross-border deals, the acquisition of a foreign business can introduce complexities in accounting for income taxes.

  • Tax accounting insights
    Global Tax Accounting Services Newsletter (January–March 2014)

    4/30/14 | Tax accounting services

    In this release we discuss a variety of global accounting, reporting and tax law developments in the first quarter of 2014, and the related tax accounting considerations.

  • Tax accounting insights
    New York tax reform: Tax accounting considerations

    4/11/14 | Tax accounting services

    On March 31, 2014, New York Governor Andrew Cuomo signed the state’s fiscal year 2014-2015 (FY 14-15) executive budget legislation.

  • Corporate Governance Series
    The Quarter close: Directors edition Q1 2014

    3/27/14 | Center for Board Governance

    This quarterly publication is designed to keep directors informed about the latest accounting and financial reporting issues.

  • Disclosing cash held offshore (Insights from the Investment Community)

    3/17/14 | PwC Investor Resource Institute

    In our discussions with members of the investment community, they noted that income tax issues are very important to their analyses and they desire more transparency into the impact of income tax related decisions on companies’ financial reporting.

  • Corporate Governance Series
    Shareholder questions: Management's considerations for 2014 annual meetings

    3/3/14 | Assurance services

    This PwC publication is intended to help management and the board of directors of public companies prepare for the annual meeting of shareholders. It contains example questions on topics that may be top-of-mind for shareholders, along with background information and suggested actions for management’s consideration.

  • Tax accounting insights
    Global Tax Accounting Services Newsletter (October-December 2013)

    2/21/14 | Tax accounting services

    In this release we discuss a variety of global accounting, reporting and tax law developments and the related tax accounting considerations.

  • Tax accounting insights
    Tax accounting retrospective (July - December 2013)

    1/28/14 | Tax accounting services

    As part of our continued effort to help organizations navigate through the complexity of today’s tax accounting issues, we’ve assembled a compilation of our Tax Accounting Services’ publications released between July 2013 and December 2013.

  • Tax accounting insights
    Around the world: When to account for tax law changes

    1/21/14 | Tax accounting services

    Keeping track of tax law changes around the world has increasingly become a challenge for businesses. Companies are rapidly expanding their geographic footprint at a time when the evolution and developments in jurisdictional tax laws are undergoing nearly constant change.

  • Tax accounting insights
    How will recently expired US tax provisions affect your financial statements?

    1/20/14 | Tax accounting services

    How will recently expired US tax provisions affect your financial statements? Tax Accounting Considerations for Expired Tax Provisions

  • Setting the standard
    Setting the standard - January 2014

    1/9/14 | Assurance services

    Welcome to the latest edition of "Setting the standard." It includes the latest updates on the standard-setting activities of the FASB and IASB. Learn more inside.

  • Tax accounting insights
    2014 Mexican tax reform package

    1/7/14 | Tax accounting services

    Tax accounting considerations of the 2014 Mexican tax reform package.

  • Tax accounting insights
    Accounting for Income Taxes: 2013 Year-end Hot Topics

    1/6/14 | Tax accounting services

    Calendar year 2013 has seen considerable activity across the global legislative and regulatory landscapes. We have seen changes to tax laws in several key territories, and 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.

  • Corporate Governance Series
    The quarter close - Directors edition: A look at this quarter's financial reporting issues - Q4 2013

    12/23/13 | Center for Board Governance

    This quarterly publication is designed to keep directors informed about the latest accounting and financial reporting issues that impact board decisions and company policies.

  • Tax accounting insights
    Global Tax Accounting Services Newsletter (July to September 2013)

    12/23/13 | Tax accounting services

    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 30 September 2013 and some important tax accounting considerations for mergers and acquisition transactions.

  • Tax accounting insights
    Income tax disclosure

    12/16/13 | Tax accounting services

    Numerous income tax accounting matters require the use of estimates, judgments, and other subjective information that can obscure the presentation in the financial statement accounts. Clarifying disclosures can enable users to gain a better understanding of the reporting entity’s income tax environment.

  • Dataline
    Dataline: Highlights of the 2013 AICPA National Conference on Banks and Savings Institutions (No. 2013-26)

    12/12/13 | Assurance services

    At the 2013 AICPA National Conference on Banks and Savings Institutions, regulators and standard setters shared views on top-of-mind issues for financial institutions.

  • Tax accounting insights
    Financial Accounting Foundation completes review of accounting for income taxes

    12/4/13 | Tax accounting services

    Financial Accounting Foundation (FAF) completed its post-implementation review of Financial Accounting Standards Board Statement No. 109, Accounting for Income Taxes (FAS 109) (codified in Accounting Standards Codification Topic 740, Income Taxes).

  • Senate Finance Committee Chairman Baucus releases staff discussion draft on cost recovery and tax accounting reform

    11/21/13 | Washington national tax services (WNTS)

    This release follows the international tax reform discussion draft and tax administration reform discussion draft.

  • Senate Finance Committee Chairman Baucus releases tax administration reform discussion draft

    11/20/13 | Washington national tax services (WNTS)

    This release, the second in a series of staff tax reform discussion drafts, follows the November 19, 2013 discussion draft on international tax reform.

  • Senate Finance Committee Chairman Baucus releases international tax reform discussion draft

    11/20/13 | Washington national tax services (WNTS)

    The Finance staff international reform discussion draft ('discussion draft') proposes to repeal or modify the current deferral system.

  • Tax accounting insights
    Tax holidays and other incentives: Determining the right accounting model

    10/15/13 | Tax accounting services

    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.

  • EITF observer
    EITF observer - September 13, 2013 meeting highlights

    9/17/13 | Assurance services

    The EITF met on September 13th, 2013 to discuss three issues. PwC's EITF observer provides you an insightful summary of decisions reached and the changes affecting GAAP.

  • 2013 Fall legislative outlook: focus on tax reform

    9/10/13 | Washington national tax services (WNTS)

    Efforts to advance tax reform legislation move into a critical phase this fall.

  • Tax accounting insights
    Patent box and technology incentives: Tax and financial reporting considerations

    8/22/13 | Tax accounting services

    This publication discusses key tax and financial reporting considerations of patent box regimes and other technology incentives.

  • Accounting guides
    Guide to Accounting for Income Taxes - 2013 edition

    8/8/13 | Assurance services

    The overall accounting model for income taxes has been in place for many years, yet the accounting for income taxes (ASC 740) continues to pose many challenges for preparers, users, and auditors. This PwC guide is intended to clarify the fundamental requirements involved in the accounting for income taxes and to highlight key points that should be considered before and after transactions are undertaken.

  • Tax accounting insights
    FASB ratifies consensus on netting unrecognized tax benefits against loss or other tax carryforward assets

    6/26/13 | Tax accounting services

    The FASB ratified the accounting guidance proposed by the 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. We expect the final Accounting Standards Update (ASU) to be issued within the next few weeks.

  • EITF observer
    EITF observer: A meeting synopsis - June 2013

    6/14/13 | Assurance services

    The EITF met on June 11, 2013 to discuss six issues. PwC's EITF observer provides you an insightful summary of decisions reached and the changes affecting US GAAP.

  • Private company reporter
    Private company reporter - June 13, 2013

    6/13/13 | Assurance services

    On June 10, the FASB endorsed each of the accounting alternatives previously approved by the PCC, related to intangible assets, goodwill and interest rate swaps. This edition of Private company reporter provides further information on the proposed alternatives, as well as highlights of other recent developments related to private company reporting.

  • Tax accounting insights
    Tax considerations relating to fair value accounting

    3/25/13 | Tax accounting services

    PwC has refreshed our 'Fair Value Accounting: Tax Considerations' publication (originally released in December 2008).

  • EITF observer
    EITF observer: A meeting synopsis - March 2013

    3/18/13 | Assurance services

    At the EITF's March 14 meeting, the Task Force discussed four Issues, reaching a final consensus on two issues (12-B and 12-G) and consensus-for-exposure on one Issue (13-B). Further discussion is expected on one issue (12-F). This edition of EITF observer provides a synopsis of the meeting.

  • Dataline
    Dataline: Highlights of the 2012 AICPA National Conference on Current SEC and PCAOB Developments (No. 2012-22)

    12/13/12 | Assurance services

    The 2012 AICPA National Conference on Current SEC and PCAOB Developments (the Conference) was held on December 3, 4, and 5, 2012. Conference presenters included representatives from regulatory and standard-setting bodies, auditors, users, preparers, industry experts, and an investor panel. Remarks centered mainly on the status of potential incorporation of IFRS into the U.S. financial reporting system, updates on regulatory and financial reporting matters, capital formation, and the auditing profession’s impact on the reliability and usefulness of financial statements.

  • Dataline
    Dataline: Financial instruments classification and measurement - An update on the FASB's tentative approach to be exposed in Q1 2013 (No. 2012-21)

    12/7/12 | Assurance services

    Classification and measurement is an important part of the FASB and IASB’s joint project on financial instruments. This Dataline provides a summary of the boards' decisions that is based on the project summaries posted on their websites, our observations of their meetings, and our understanding of their intent.

  • Dataline
    Dataline: 2012 year-end accounting and reporting considerations - Leading practices and lessons learned on key topics (No. 2012-20)

    12/3/12 | Assurance services

    This year end, entities continue to face many complex financial reporting issues such as providing new fair value disclosures, accounting for debt modifications, and evaluating revenue recognition guidance. Economic challenges around the world continue to have broad financial reporting implications. While not an all-inclusive list, this Dataline is intended to serve as a timely reminder of leading practices and lessons learned on key issues that companies should consider as they navigate the year-end financial reporting process.

  • Dataline
    Dataline: Accounting and disclosure implications of Hurricane Sandy (No. 2012-17)

    11/12/12 | Assurance services

    Hurricane Sandy is expected to be the second-costliest Atlantic hurricane in history, only surpassed by Hurricane Katrina in 2005. Many businesses were disrupted by Hurricane Sandy and its aftermath including the New York Stock Exchange, which was closed for two days. While not all-inclusive, this Dataline discusses several accounting and disclosure-related matters companies may encounter in dealing with the financial reporting implications of Hurricane Sandy.

  • Tax accounting insights
    Foreign currency tax accounting

    10/18/12

    This publication addresses key considerations in applying U.S. GAAP with respect to foreign currency income tax reporting. It is designed to be a reference guide to explore tax accounting for foreign currency. It begins with the “basics” and relevant areas of focus when applying Accounting Standards Codification (ASC) 830, Foreign Currency Matters, and also discusses the application of ASC 740, Accounting for Income Taxes, to foreign currency.

  • Tax accounting insights
    Deferred taxes on foreign earnings: A road map

    9/6/12 | Tax accounting services

    Asserting indefinite reinvestment traditionally has been a widespread practice among multinational businesses. A majority of large companies make the assertion with respect to much, if not all, of their foreign earnings. To assist organizations in making this assertion, PwC has refreshed this publication (originally released in December of 2010).

  • Practical tip
    Practical tip: Undistributed foreign earnings: disclosure requirements and considerations (No. 2012-03)

    6/19/12 | Assurance services

    Undistributed foreign earnings that are indefinitely reinvested outside the United States result in a significant unrecorded tax liability for many U.S.-based multinationals. The amount of undistributed foreign earnings has grown substantially in recent years. As a result, expectations for transparency have increased along with concerns about a lack of comparability or consistency in disclosures. This Practical tip focuses on the U.S. GAAP disclosure requirements and considerations relating to undistributed foreign earnings.

  • Tax accounting insights
    Key areas of focus when accounting for income taxes during interim periods

    3/21/12 | Tax accounting services

    At the close of every quarter, companies recognize income tax expense or benefit in their respective quarterly financial statements in accordance with interim reporting guidance under FASB Accounting Standards Codification 740, Income Taxes (ASC 740). When applied, this accounting model can present formidable challenges to many companies and can sometimes produce unexpected results. This edition of Tax accounting insights highlights the "basics" as well as key areas of focus when accounting for income taxes during interim periods.

  • Tax accounting insights
    Income Tax Accounting, A comparative look between US GAAP and IFRS

    1/5/12 | Tax accounting services

    Significant differences continue to exist between the IASB's anf the FASB's income tax accounting models, notwithstanding ongoing convergence efforts. This PwC publication provides a comparative summary between standards and a closer look at seven significant differences -- tax basis, initial recognition, intercompany transactions, accounting for uncertain tax positions, allocating income taxes, share-based compensation, and investment in subsidiaries.

  • Tax accounting insights
    Seven principles to consider when preparing a tax provision for subsidiary or carve-out financial statements

    5/16/11 | Tax accounting services

    Income tax provision preparation for stand-alone subsidiary or carve-out financial statements is a challenging and complex area of practice. In completing these calculations, we believe it is important to have a consistent, thoughtful framework for addressing the many judgments involved in the process. To assist you with the preparation of separate company financial statements, PwC's Tax accounting insights presents "Seven principles to consider when preparing a tax provision for subsidiary or carve-out financial statements" publication.

  • Tax accounting insights
    Tax indemnification arrangements: Navigating the financial reporting

    11/16/10 | Tax accounting services

    Income tax indemnifications are established in a variety of transactions, including business acquisitions, corporate spin-offs and initial public offerings (IPOs). Accounting for an income tax indemnification arrangement depends upon whether the company is obligated to the taxing authority, the relationship between the parties and the type of transaction.

  • Tax accounting insights
    Goodwill impairment testing: Tax considerations

    12/21/09 | Tax accounting services

    Goodwill impairment testing continues to be a challenging and complex area of practice. As companies perform goodwill assessments, tax considerations can play a critical role in the final conclusions. To assist you with your goodwill impairment testing, PwC has refreshed our Goodwill Impairment Testing: Tax Considerations publication (originally released in December 2009).

  • Tax accounting insights
    Debt restructurings and bankruptcy: Accounting, tax and FAS 109 considerations

    6/4/09 | Tax accounting services

    Current market conditions have precipitated efforts by companies, across industries and markets, to reduce or restructure their debt obligations.The transactions and events occurring in these settings can have significant and sometimes unique financial reporting consequences.This PwC publication provides an overview of these transactions and events from both a financial reporting and income tax perspective.

  • M&A snapshot
    Even your tax rate will change (M&A snapshot)

    3/1/09 | Assurance services

    Are you ready for volatility in your effective tax rate? The new M&A standards will likely impact a company's effective tax rate. This impact will be felt by acquisitive companies in all industries, public and private, and as early as the first quarter of 2009 because parts of the new M&A standards apply to prior acquisitions. This installment of Mergers & Acquisitions—A snapshot focuses on how the accounting for merger and acquisition transactions will create volatility in an acquirer's effective tax rate in periods before and after an acquisition.

  • M&A snapshot
    Deal or no deal: Why you should care about the new M&A standards (M&A snapshot)

    2/1/09 | Assurance services

    Did you know that the new M&A standards could impact your company regardless of whether you plan to close a deal? Given the current economic environment, understanding the new M&A standards may not be a priority for many companies, particularly if M&A activity is not on the horizon in the foreseeable future. However, companies should be careful not to overlook the new M&A standards, as they may have a significant impact, even without a deal. This installment of Mergers & Acquisitions - A snapshot will help you avoid last-minute surprises by understanding how the new accounting and reporting standards for M&A may affect your financial reporting even though you haven’t closed a deal.

  • Tax accounting insights
    Stock option awards under IFRS: Tax accounting impacts earnings

    7/7/08 | Tax accounting services

    PwC analysis of the potential impact of IFRS on shared-payment stock plans. An IFRS conversion may affect cash taxes and affect financial reporting systems and processes.

  • Tax accounting insights
    More likely than not: A comparison of FIN 48 and the tax penalty standard

    6/2/08 | Tax accounting services

    Efforts intended to strengthen objectivity and transparency with respect to tax planning, compliance and conflict resolution have converged around the use of a MLTN (more likely than not) standard. This PwC publication explores the FIN 48's more likely than not (MTLN) standard on whether a position taken, or expected to be taken, in a tax return is more likely than not to be sustained.