Federal Banking Agencies Release Guidance on New Tax Law
Last week we posted about steps taken by the U.S. Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) to provide entities with practical relief in complying with reporting requirements stemming from the tax bill enacted in late-December. Yesterday the federal banking agencies issued an interagency statement to provide guidance to institutions on certain accounting and reporting implications of the new tax law.
In the statement, the agencies note that institutions can apply FASB's proposed reclassification guidance (to mitigate the disproportionate tax effect that the bill will have in Accumulated Other Comprehensive Income) for the purposes of the December 31 Call Report. The statement also provides guidance regarding the calculation and reporting of regulatory capital ratios. In addition, the guidance states that institutions may use the measurement period approach described in documents recently issued by the SEC and FASB when preparing financial statements and regulatory reports.