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Tax reform has immediate implications for accounting and financial reporting

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The new tax law signed into effect on Dec. 22, 2017, will generate a sweeping overhaul of individual, business, and international taxes. For some entities, particularly multinationals, the effects of the changes may be extremely complex. Because ASC 740 requires entities to account for the effects of new tax legislation during the interim or annual period when the legislation is enacted, rather than the date the new law is effective, calendar-year entities must record the effects of the act in their 2017 financial statements.

This publication summarizes the requirements under ASC 740 for the enacted changes in tax laws and rates and discusses general accounting and financial reporting implications of the new tax reform act.