Tax Insight

Tax accounting for divestitures: Held-for-sale considerations

Insight
12 minute read
June 24, 2026

What happened?

The deals market remains active as companies reassess capital allocation and operational priorities in response to a rapidly evolving economic and trade environment. At the same time, the significant capital demands associated with AI-enabled transformations have heightened the focus on strategic portfolio reviews. As a result, many companies are actively pursuing divestitures of non-core assets to unlock capital, streamline operations, and prioritize investments.

Why is it relevant?

A divestiture is often a transformational event for a company, with broad implications across financial reporting, tax, and operations. Divestitures can also require the application of complex accounting guidance related to the held-for-sale classification and recognition of income taxes that may not be routinely encountered in a company's reporting cycle.

These considerations are often further complicated by transaction-specific factors—such as timing, deal structure, and the evolving regulatory and global legislative landscape. Such factors can affect the determination and reporting of the disposal group and related tax accounting impacts.

Actions to consider

Companies should proactively assess the tax accounting implications of a potential divestiture early in the transaction process. This assessment includes developing a thorough understanding of the anticipated deal structure and the applicable tax laws in each relevant jurisdiction to identify the tax accounting consequences associated with the held-for-sale classification of the disposal group. This Tax Insight outlines the key considerations companies should evaluate in performing this assessment.

For more details, read the full Tax Insight linked below.