The Securities and Exchange Commission (SEC) has issued accounting guidance in the wake of the newly-approved Tax Cuts and Jobs Act.
Officials said publication of staff guidance for publicly traded companies, auditors, and others serves to ensure timely public disclosures of accounting impacts.
“Allowing entities to take a reasonable period to measure and recognize the effects of the Act while requiring robust disclosures to investors during that period, is a responsible step that promotes the provision of relevant, timely and decision-useful information,” Wes Bricker, the SEC’s chief accountant said.
SEC officials said the Statements in Staff Accounting Bulletins and Compliance and Disclosure Interpretations are not rules, regulations or statements of the Commission – but represent interpretations and practices followed by the SEC’s Office of the Chief Accountant and the Division of Corporation Finance in administering the disclosure requirements of the federal securities laws.
The Tax Cuts and Jobs Act represents one of the most significant overhauls to the United States federal tax code since 1986, officials said, and could have a significant impact on an entity’s domestic and international tax consequences.
“This guidance recognizes that investors demand and deserve high-quality information, while also recognizing that entities may face challenges in accounting for one of the most comprehensive changes to the federal tax code,” Bill Hinman, the SEC’s director of the Division of Corporation Finance, said.