During a January 10, 2018 meeting, the Financial Accounting Standards Board heard recommendations from the Staff on several issues on accounting for the effects of the recently enacted Tax Cuts and Jobs Act. The Staff recommended allowing, but not requiring, private and not-for-profit companies filing US GAAP financial statements to apply SAB 118. The Board concurred with this recommendation and it will be published as a Q&A on a new FASB website.

In addition, the Staff made the following recommendations on accounting for four other accounting issues:

— Companies should not discount the one-time transition tax liability.

— Companies should not apply discounting to receivables recorded for alternative minimum tax credit carryforwards.

— Companies should not be required to account for the base erosion anti-abuse tax (BEAT) in computing deferred taxes but rather should account for any BEAT liability in the period incurred. The Staff will be considering the required disclosures in regard to the BEAT.

— Companies may make an accounting policy election to either compute deferred taxes for global intangible low-taxed income (GILTI) in the period the entity becomes subject to GILTI; or, establish deferred taxes (similar to the guidance that currently exists with respect to basis differences that will reverse under current Subpart F rules) for basis differences that upon reversal will be subject to GILTI. Companies would need to disclose the accounting policy adopted.

These recommendations are preliminary views that will be discussed at the EITF meeting on January 18 to obtain input from the Board and EITF members on the Staff recommendations before approving and publishing them. Additionally, the FASB agreed to take up a narrow-scope project on the reclassification of certain tax effects stranded in accumulated other comprehensive income for only the Tax Cuts and Jobs Act effects.

A detailed Tax Alert on the meeting is forthcoming.

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