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.
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