Full disclosure: Income taxes

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Our Full disclosure podcast series brings you back to the basics on all things related to financial statement presentation and disclosure, from the top of the financial statements through the footnotes.

In this week’s edition of our ongoing series focused on the financial statements, we look at income taxes, including balance sheet and income statement presentation, key disclosures, and related SEC comment letter trends. Kassie Bauman, a managing director in our National Office who specializes in income tax accounting, is back in the guest seat to share helpful insights with our host, Heather Horn.

Topics include:

• 1:20 - Balance sheet presentation. Kassie dives into the different income tax-related line items on the balance sheet.
• 6:17 - DTAs, DTLs, and valuation allowances. Kassie explains the required disclosures related to deferred tax assets, deferred tax liabilities, and valuation allowances, and she highlights the SEC comment letter trends in these areas.
• 14:35 - Other balance sheet disclosures. Kassie shares some final reminders on balance sheet disclosures, including the requirement to disclose unrecognized DTLs.
• 17:19 - Income statement presentation and disclosure. Next we break down the presentation and disclosure requirements for the income statement, including income tax expense and the effective tax rate, and we discuss related SEC comment letter trends.
• 26:02 - Other key disclosures. Kassie highlights other disclosures to pay attention to, including investment tax credits, tax holidays, and significant income tax risks and uncertainties.
• 28:46 - Standard setting. Kassie updates listeners on the FASB’s project on income tax disclosures.

Want to learn more? Read:

• Chapter 16: Income taxes of our Financial statement presentation guide

Listen to our podcasts:

• Uncertain tax positions: The basics
• Valuation allowance for deferred tax assets – the basics
• Accounting for outside tax basis differences

And watch our video:

• Income taxes: Uncertain tax positions, disclosures

Kassie Bauman is a managing director in PwC's National Office who consults on tax accounting under US GAAP and IFRS. Kassie has more than 20 years of auditing and accounting experience, including almost a decade of experience addressing complex technical accounting matters as part of our National Office.

Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With nearly 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

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