Table of Contents

Chapter 1 - The Impact of the Tax Cuts and Jobs Act on GAAP and Financial Reporting - Section 1. 7

General 7

I. GAAP Impact of Tax Changes Made by the Tax Cuts and Jobs Act 8

A. Tax Rate Change Impact on Deferred Income Taxes. 8

B. ASU 2018-02: Income Statement—Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. 13

C. Revaluing Deferred Tax Assets from NOLs. 26

D. Impact of Indefinite NOL Carryover Period on Deferred Tax Asset Valuation Accounts. 29

Chapter 1 - Section 1 Review Questions. 36

Chapter 1 - The Impact of the Tax Cuts and Jobs Act on GAAP and Financial Reporting - Section 2. 37

E. Accounting for the Change from S to C Corporation. 37

F. New Limitation on Interest Deduction. 39

G. Elimination of Like-Kind Exchanges on Personal Property. 41

H. Accounting for Bonus and Section 179 Depreciation in GAAP Financial Statements. 44

I. Overall Impact of Reduction in Tax Rate on SEC Companies. 53

Chapter 1 - Section 2 Review Questions. 57

Chapter 1 - The Impact of the Tax Cuts and Jobs Act on GAAP and Financial Reporting - Section 3. 58

J. SEC Staff Accounting Bulletin (SAB) No. 118. 58

K. FASB Staff Q&A: Topic 740, No. 2: Whether to Discount the Tax Liability on the Deemed Repatriation 60

II. Other Tax-Related Issues. 61

A. Deferred Tax Asset Recorded on Other Carryovers. 61

B. Presentation of Tax Benefit of NOL Carryover 63

C. Presenting Deferred Tax Assets and Liabilities on the Balance Sheet—FASB’s ASU 2015-17. 65

D. Fixing the Disclosures in Uncertain Tax Positions for Nonpublic Entities. 66

Chapter 1 - Section 3 Review Questions. 70

Suggested Solutions. 71

Glossary. 77

Index. 78

Final Examination. 80

CPASelfstudy.com Course Evaluation. 83