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Impact of the Tax Cuts and Jobs Act on Accounting for Deferred Income Taxes
Author(s) -
Oxner Karen M.,
Oxner Thomas H.,
Phillips Ashley D.
Publication year - 2018
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.22339
Subject(s) - deferred tax , accounting , business , write off , state income tax , indirect tax , value added tax , income tax , economics , balance sheet , tax reform , finance , gross income , public economics
The recently enacted Tax Cuts and Jobs Act lowers significantly the corporate tax rate, among other provisions. Accounting for deferred tax assets and liabilities requires that effects of a tax rate change on existing deferred tax assets and liabilities be brought into income in the period of enactment. This article provides an overview of tax accounting for financial reporting, as well as analysis of the existing net deferred tax position of the 30 Dow Jones Industrial Average companies for 2016. The impact of the reduced tax rate on both the balance sheet and income statement are estimated in the article. © 2018 Wiley Periodicals, Inc.