Measuring GILTI deferred taxes

In depth , PwC US Sep 13, 2018

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Companies can elect to record deferred taxes for GILTI. We provide a model for how to measure them.

Two-step model and other considerations

The Tax Cuts and Jobs Act of 2017 introduced a new tax on global intangible low-taxed income (GILTI). ASC 740, Income Taxes, does not directly address the accounting for GILTI. As a result, the FASB staff concluded that entities can make an accounting policy election to either: (1) treat GILTI as a period cost if and when incurred, or (2) recognize deferred taxes for basis differences that are expected to reverse as GILTI in future years. For entities that elect to recognize deferred taxes for GILTI, this In depth describes one acceptable approach that is based on the principles of ASC 740, as well as multiple factors that require consideration.

For a deeper discussion on measuring GILTI deferred taxes, please contact:

Jennifer Spang

Partner, National Professional Services Group, PwC US

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Brett Cohen

Partner, National Professional Services Group, PwC US

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Kassie Bauman

Managing Director, National Professional Services Group, PwC US

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Ryan Weldon

Director, National Professional Services Group, PwC US

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David Schmid
IFRS & US Standard Setting Leader, National Professional Services Group, PwC US
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