While the current tax reform bills are expected to have positive long-term effects on the economy and bank performance, the Financial Accounting Standards Board’s standards require banks to include the impact of the new tax rates in the year that the law is enacted. If tax reform is enacted this year, this could adversely impact regulatory capital positions for many banks in 2017, as deferred tax assets and liabilities, among other things, are revalued.
The American Bankers Association has compiled a preliminary list of accounting and capital challenges that bankers will need to address as they head into the year-end reporting season. It is recommended that bankers review this with their board members, auditors and examiners prior to starting their end-of-year reporting processes. For more information, contact ABA’s John Kinsella or Josh Stein.
