Statement on the Tax Cuts and Jobs Act
Chairman Jay Clayton
Commissioner Kara M. Stein
Commissioner Michael S. Piwowar
Dec. 22, 2017
Earlier today, the President signed into law the Tax Cuts and Jobs Act (“TCJA”), which enacts significant changes to U.S. tax and related laws. The Commission and its staff have been actively monitoring the bill, including evaluating whether it would be necessary or appropriate to provide guidance to market participants.
To that end, Commission staff in the Office of the Chief Accountant and the Division of Corporation Finance today issued SAB 118, which provides important guidance to issuers, auditors, and others, as issuers seek to reflect the impacts of the TCJA on their financial statements (e.g., on deferred tax assets). The staff guidance, which reflects the approach taken in prior situations where legislative changes could significantly affect financial reporting, provides a “measurement period” for issuers to evaluate the impacts of the TCJA on the their financial statements. Importantly, the guidance also sets forth staff expectations for disclosure to investors during the measurement period. New C&DI 110.02 similarly provides guidance on how issuers are to comply with obligations under Item 2.06 of Form 8-K as they consider the implications of the TCJA on their financial reporting.
We thank the staff for the development of practical guidance that will assist issuers in their compliance efforts and provide for an orderly implementation process while ensuring the protection of investors.