On May 28, the Department of the Treasury released the General Explanation of the Administration's Fiscal Year 2022 Revenue Proposals (“Green Book”), outlining a number of proposed amendments to the Internal Revenue Code (“IRC”), including provisions that would impact tax accounting. A few key highlights include:
- Effects of a change in tax law or rates are recognized in the period that includes the enactment date
- Increase from 21% to 28% statutory corporate tax rate
- Impacts to valuation allowance assessments
- Restrict deductions of excessive interest of members of financial reporting groups for disproportionate borrowing in the United States
Companies should stay abreast of current legislative developments and evaluate the potential implications that these developments may have on their business, including financial reporting, to ensure they are prepared to account for these changes in the period of enactment
