Tax accounting reminders
Calendar year 2014 has seen considerable activity in the legislative and regulatory landscapes both in the United States and abroad. These developments, combined with an environment of political and economic uncertainty, have added to the existing challenges in accounting for income taxes.
SEC comment letter trends
Calendar year 2014 continued to see a significant number of tax-related comment letters issued by the staff of the Securities and Exchange Commission (SEC). Of the comment letters released to the public between January 1, 2014 and September 30, 2014, almost 500 of the comments related to tax matters.
Throughout 2014, the Financial Accounting Standards Board (FASB) continued to take steps to clarify or amend existing accounting guidance. In addition, the FASB introduced several income tax accounting topics as part of its initiative to reduce complexity in accounting standards.
US domestic law
US GAAP requires filers to measure current and deferred income taxes based upon the laws enacted as of the relevant reporting period. Calendar year 2014 saw changes to both US federal and state tax law including the Tax Increase Prevention Act of 2014.
Key international tax law changes
The global tax environment continues to evolve as companies are faced with a rapidly-changing business landscape, increased stakeholder scrutiny, and a heightened enforcement environment. Trends in responsibility and integrated reporting, as well as the use of non-GAAP measures have also gained momentum. US GAAP requires filers to measure current and deferred income taxes based upon the laws enacted as of the relevant reporting period. Calendar year 2014 saw significant tax law changes in many jurisdictions worldwide.