Tentative Board Decisions

Tentative Board decisions are provided for those interested in following the Board’s deliberations. All of the reported decisions are tentative and may be changed at future Board meetings.

Wednesday, January 10, 2018 FASB Board Meeting

Financial reporting effects of the Tax Cuts and Jobs Act. The Board decided to add a project to its agenda on the reclassification of certain tax effects from accumulated other comprehensive income to retained earnings.

Reclassification Approach

The Board decided to require a reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects resulting from the newly enacted corporate tax rate in the Tax Cuts and Jobs Act.

Backwards Tracing Research Project

The Board decided to add a broader project to its research agenda on the accounting for subsequent effects of changes in deferred tax liabilities and assets that were originally charged or credited directly to equity (“backwards tracing”).

Transition Method and Disclosures

The Board decided to require the application of the reclassification to each period in which the effect of the Tax Cuts and Jobs Act (or portion thereof) is recorded. That requirement would be applied retrospectively to the date of enactment if the forthcoming accounting guidance is not adopted early.

The Board decided to require the following transition disclosures:
  1. The nature and reason for the change in accounting principle 
  2. A description of the prior-period information that has been retrospectively adjusted 
  3. The effect of the reclassification on affected financial statement line items.
Early Adoption

The Board decided to permit early adoption for public business entities for which financial statements have not yet been issued and all other entities for which financial statements have not yet been made available for issuance.

Effective Date

The Board decided that the proposed amendments would be effective for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

Cost-Benefit Analysis, Exposure Draft, and Comment Period

The Board concluded that it has received sufficient information and analysis to make an informed decision on the issues presented and that the expected benefits of the amendments justify the expected costs (subject to comment letters received during the comment period).

The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot.

The Board also decided that the comment period for the proposed Update should be 15 days.

Other Implementation Issues

The Board discussed the staff’s preliminary views on five implementation issues related to the Tax Cuts and Jobs Act. The Board did not make any decisions on those five issues, which are as follows:
  1. The use of Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, by private companies and not-for-profit entities
  2. Whether to discount the tax liability on the deemed repatriation of foreign earnings 
  3. Whether to discount alternative minimum tax credits that become refundable 
  4. Accounting for the base erosion anti-abuse tax 
  5. Accounting for global intangible low-taxed income.
The FASB staff will prepare FASB staff Q&As for each of those issues and will post them to the FASB website at a future date.