Income taxes: 2017 SEC comment letter trends

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SEC comment letter trends , PwC US Dec 11, 2017

Understand the SEC staff’s expectations for income tax-related disclosures through examples of the comments issued to financial statement preparers across several industries.

Key findings from the SEC comment letter review

  • In relation to income taxes, the SEC staff focuses on areas of judgment. They seek additional insight to understand what management considered in coming to their conclusions. 
  • Nearly 60% of the comment letters reviewed for 2017 relate to four categories: presentation of the effective tax rate, assessments of the realizability of deferred tax assets, indefinite reinvestment of foreign earnings, and uncertain tax positions. 
  • These income tax focus areas are consistent with the SEC comment letter trends we have seen over the last several years. 
  • Manufacturing/construction, information technologies, and consumer products together received 43% of the 2017 comments released, but comments were issued to a broad range of industries. 
  • We believe that income taxes will continue to be an area of significant interest and inquiry during 2018.

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David Mandelbaum

David Mandelbaum

Partner, National Professional Services Group, PwC US

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