Perhaps no sector in the American economy is better positioned for growth in the current economic environment than manufacturing. Lower taxes and reduced regulation should help the industry grow and innovate. While familiar obstacles remain, including a shortage of skilled labor, the threat of cyber-attacks and tariff/trade disruption, and the need to advance technology, manufacturers generally have reason to be pretty upbeat these days.
At the same time, these new tax laws, along with accounting rule changes and constantly shifting risk strategies, are challenging directors who serve on audit committees for manufacturing companies to be more engaged than ever before. Our goal with this publication is to provide you a high-level review of current accounting and tax concerns facing manufacturers in order to focus on areas that may need increased oversight.
Tax reform will drive much of the learning that directors need to do for 2018. Several provisions in the recently enacted tax bill could affect manufacturers in a variety of ways, such as the reduction of the corporate tax rate, full expensing for asset purchases, repeal of the Section 199 deduction, increased Section 179 expensing for assets, repatriation of earnings held overseas, and other provisions. More information on the pivotal issues is provided in the following chapter on tax reform.
Download our 2018 Audit Committee Outlook for Manufacturing to understand how recent and near-future developments impact corporate financial reporting and disclosure.
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