Tax accounting methods
Evaluate impact of book changes on tax accounting methods, assess effect of changes on the company’s cash tax position, Identify any new book/tax differences (e.g., unbilled contingent consideration), Identify any required tax accounting method changes (e.g., new deferred revenue), Prepare or review any Forms 3115 (Application for Change in Accounting Method), and Calculate or review any required Section 481 adjustments.
ASC 740 (Accounting for Income Taxes)
Identify adjustments to existing deferred tax balances (e.g., recognition of advance payments deferred to extent of new book deferral), Evaluate any changes in current/non-current deferred classification, Consider impacts on any valuation allowances, uncertain tax positions, Consider effect on intraperiod allocations.
Evaluate impact of transfer pricing policies calculated by reference to impacted revenues or costs, including on future cash flow, filing positions, and financial statement disclosures. Consider potential need for changes to policies or documentation.
Evaluate effect of any book and/or tax method changes on E&P, Consider potential impacts on determination of foreign source income. Determine whether there is an effect to controlled foreign corporation debt netting calculation, Identify any impacts to allocation of interest expense under fair market value apportionment method.
State and local tax
Evaluate sales and use tax implications, including potential impact on the amount subject to tax and possible system needs, Evaluate income and net worth implications, including potential impact on tax base and apportionment.
Value added taxes
Identify any VAT implications (e.g., as whether principal or agent for VAT reporting).