The Financial Accounting Resource Center™ is a comprehensive research service that provides the full text of standards, the latest news from the Accounting Policy & Practice Report ®,...
By Steven Marcy
Dec. 6 — Securities and Exchange Commission accountants continue to encounter uncertainty among multinational companies when they assess whether they should book a tax liability for a parent company from undistributed income earned overseas, an SEC accounting fellow told an accounting conference.
SEC accounting guidance presumes “undistributed earnings of a subsidiary will be transferred to the parent entity, resulting in the parent entity accruing taxes on the undistributed earnings,” SEC accounting fellow Brian Staniszewski told the American Institute of CPAs’ annual SEC and PCAOB developments conference.
However, Staniszewski also said Dec. 5 presumption of a tax liability for a parent company “can be overcome, and no income taxes would be accrued by the parent entity, if certain criteria are met.” That criteria must include “evidence of specific plans for reinvestment of undistributed earnings of a subsidiary which demonstrate that remittance of the earnings will be postponed indefinitely,” according to a footnote in the prepared text of Staniszewski’s conference remarks.
“This continues to be an area involving a significant amount of judgment, " Staniszewski told the conference. “We have questioned registrants in situations where disclosures made outside of the audited financial statements call into question (or potentially contradict) assumptions relied upon in accounting for undistributed earnings” under Financial Accounting Standards Board rules governing income taxes, ASC 740
To contact the reporter on this story: Steven Marcy in Washington at email@example.com
To contact the editor responsible for this story: S. Ali Sartipzadeh at firstname.lastname@example.org
Staniszewski’s prepared remarks are at https://www.sec.gov/news/speech/staniszewski-2016-aicpa.html.
Copyright © 2016 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)