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ASC 740 Insights

Tax and accounting highlights

In this recurring publication series, Deloitte's National Tax Accounting group delivers valuable insights to help corporate tax departments mitigate risk and identify potential opportunities. Each article highlights certain recent tax and accounting developments that may have accounting for income tax (ASC 740) implications.

ASC 740 implications of new limitations on excessive employee compensation

March 14, 2018

US tax legislation, enacted on December 22, 2017, modifies Internal Revenue Code (IRC) Section 162(m) for compensation deductions of certain highly compensated officers and employees. Interim and year-end tax provision processes should include consideration of legislative changes on current and deferred tax accounting, including whether existing deferred tax assets or liabilities should be adjusted.

Deloitte’s latest Tax Accounting Perspective discusses the changes to limitations on deductions for excessive compensation, and related tax accounting considerations.

Additional resources

Some companies may need assistance to consider and quantify the implications of the tax reform bill in tandem with Deloitte Consulting services. Deloitte's Tax Reform Navigator (TRN) provides customized insights that can help companies prepare for tax reform. Using a company's actual financial data, Deloitte professionals can utilize the TRN to explore a full range of "what if" scenarios, including the consideration of tax rate reductions on deferred tax assets and liabilities.

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