Preparing carve-out financial statements can be complicated and often highly subjective. Accounting rules and guidance governing the composition of the carve-out entity and the resulting application of US generally accepted accounting principles is limited. The passage of the 2017 Act has created additional complexity and judgments in preparing the carve-out tax provision.
Generally, carve-outs will require data and calculations at a more granular level, as historical tax processes and systems were designed when the carve-out entity was part of a larger group.
Companies may need to prepare separate tax provision calculations for each
material jurisdiction in which the carve-out operations take place.