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International Tax: Do Last Year's Financial Statement Disclosures Still Work?

USA
17 Jan 2011

The Securities and Exchange Commission (SEC) has recently stepped up efforts to create more transparency around the tax effects of foreign operations in financial statement disclosures. With the heightened SEC scrutiny, we also expect that attest firms will react by diving deeper into the foreign tax provision calculations and disclosures and require more documentation. As companies prepare their year-end income tax provision and draft their income tax footnote and related disclosures, they should consider whether they are adequately disclosing the tax impact of their foreign operations. Taxand USA highlights the key financial statement disclosures regarding your company's foreign tax provision and addresses items for consideration regarding your company's permanent reinvestment assertion.

Taxand's Take


With the SEC's increased emphasis on foreign income tax provisions and related positions and disclosures, we anticipate that many financial audit teams will be paying closer attention to their foreign income tax provision. To avoid any unnecessary surprises, we recommend companies have discussions with their audit team to gauge their requirements and expectations for their year-end income tax provision. In addition, as companies prepare their year-end income tax provision, they should: (1) challenge the foundation of their foreign income tax provision calculations and related judgments, (2) revisit their foreign tax disclosures and (3) consider whether their related documentation is sufficient. We expect many financial auditors will be doing the same.

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Your Taxand contact for further queries is:
Albert W. Liguori
T. +1 212 763 1638
E. aliguori@alvarezandmarsal.com

Taxand's Take Author