United States

KPMG Comments on FASB Proposed Changes to Accounting for Income Taxes on Intercompany Asset Transfers and Deferred Tax Classification

Jun 01, 2015
From the Financial Reporting Network

KPMG LLP recently commented on the proposed FASB ASUs, Intra-Entity Asset Transfers, and Balance Sheet Classification of Deferred Taxes. The proposed ASU about intra-entity transfers would require the seller and the buyer in an intercompany asset transfer to immediately recognize the current and deferred income tax consequences of the transaction. The proposal about balance sheet classification would require an entity to present as noncurrent in a classified balance sheet the net deferred tax asset or liability for each tax-paying component in a tax jurisdiction. The FASB issued the proposed ASUs as part of its Simplification Initiative.

KPMG commented that the current and proposed models of accounting for the income tax consequences of intercompany asset transfers have merit, but observed that it is not apparent that the proposed model simplifies or improves the accounting for income taxes. KPMG commented that the proposal to classify deferred tax assets and liabilities as noncurrent would be a simplification and encouraged the Board to consider the feedback from financial statement users to evaluate the proposed change. KPMG also provided suggestions for enhancing the proposals.

Read KPMG Comment Letter

Read Proposed FASB ASUs