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How FASB can ease the tax law time crunch

Larry Smith | January 9, 2018

Existing accounting rules, generally referred to as Generally Accepted Accounting Principles (GAAP), require that an entity’s balance sheet should reflect the impact of the tax law in effect at the balance sheet date. The fact that President Trump signed into law the new tax bill on Dec. 22 (2017 Act) means that corporate accountants need to analyze what impact the changes the 2017 Act have on an entity’s balance sheet as of dates on or after Dec. 22, 2017, with only days remaining for those companies with a calendar year-end.

While changes in tax law are not unusual, sweeping changes like the ones embedded in the new bill are. Tax law, both before and after the changes created by the 2017 Act, is extremely complex, as is the accounting for it.

The Financial Accounting Standards Board (FASB) has already received questions on some aspects of the new law, and those questions are likely just the tip of the iceberg. Individual FASB members are already considering how FASB... To get the full story, subscribe now.