Two men share securities regulation news

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Securities Regulation Daily, December 22, 2017

SEC issues tax reform guidance

By Mark S. Nelson, J.D.

The SEC issued guidance for companies that will be making public disclosures regarding their financial statements in light of the newly enacted Tax Cuts and Jobs Act. President Trump signed the TCJA into law today, bringing to fruition a decades-long process of revising the tax laws in a manner that broadly impacts virtually all public companies. A statement by all three current commissioners said that the new guidance (Fact Sheet) will help companies with a variety of disclosures matters, including the treatment of deferred tax assets. The statement also said the guidance tracks guidance previously issued by the SEC in response to prior tax law changes.

Specifically, the SEC amended Staff Accounting Bulletin No. 118 to add Section EE in order to deal with companies’ concerns about matters not dealt with completely by Accounting Standards Codification No. 740, including the income tax effects of the TCJA. The SEC’s main concern is that companies will be unable to evaluate these tax consequences for financial statements to be issued soon that include the TCJA’s date of enactment, December 22, 2017.

As a result, under revised SAB 118, the SEC said a company should include a reasonable estimate of the income tax effects of the TCJA in the first reporting period for which the company is able to make such determination. A company will need to establish a provisional amount during a "measurement period," which is defined as the reporting period that includes the enactment date of the TCJA and the time when the company has evaluated any information needed to meet the requirements of ASC 740. The SEC also issued a new Form 8-K Compliance and Disclosure Interpretation (Question 110.02) to clarify required disclosures under Item 2.06.

MainStory: TopStory CorporateFinance CorporateGovernance CorpGovNews GCNNews ExecutiveCompensation FedTracker Securities FinancialIntermediaries PublicCompanyReportingDisclosure RiskManagement SECNewsSpeeches TrumpAdministrationNews

Back to Top

Securities Regulation Daily

Introducing Wolters Kluwer Securities Regulation Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.


A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.