Tax Concerns Addressed
The Financial Accounting Standards Board (FASB) proposed updated accounting standards to address complications from the Tax Cuts and Jobs Act, one of which is the need to assess impairments of deferred tax items due to the change in the corporate tax rate and imbalances in accumulated other comprehensive income (AOCI). Due to the new tax law, banks would reclassify amounts from AOCI to retained earnings.
The proposal would be effective for all banks for fiscal years beginning after December 15, 2018 as well as interim periods within those fiscal years. Early adoption would be permitted. Additionally, federal banking regulators issued an interagency statement on accounting and reporting under the tax law that provides an overview of the law’s impact with specifics on the AOCI issue.
ICBA submitted a comment letter last week asking FASB and the agencies to ensure tax reform doesn’t distort earnings and regulatory capital.
It’s Time for CECL
As the effective date of the Current Expected Credit Loss (CECL) model approaches, IBAT is offering a half-day summit to get you and your team ready for the changes.
The program will take place in three different locations around the state – Lubbock, Dallas and San Antonio – on April 17, 18 and 19, respectively.
These CECL workshops will provide in-depth discussion about how to prepare your bank for CECL implementation. Be on the lookout for additional information and registration links coming your way soon.
Additionally, have you seen the January/February edition of IBAT’s magazine, The Texas Independent Banker, that includes an article about CECL’s effect on taxes, plus a compilation of accounting methods for the timing of bad debt worthlessness. Be sure to read about it here.