Tax Reform: How to Cover in Your MD&A
TheCorporateCounsel.net features comments from Partner Brink Dickerson about tax reform and management discussion and analysis (MD&A). Dickerson cites three primary impacts of tax reform on MD&A drafting, saying, “Prospectively, the impact of the lower rate. This is a ‘known trend or uncertainty’ that needs to be discussed even where a company does not typically address future tax rates in its SEC filings. Historically, the impact of the change in the tax rate change on tax assets and liabilities, which will show up in the year-end financial statements. Prospectively, changes in repatriation plans, which again is ‘known trend or uncertainty.’” According to the story, Dickerson “also expects a more granular discussion of future tax rates in earnings calls – and he suggests that since the analysts certainly will ask about it, many companies will want to include a slide on taxes & tax rates and probably a few sentences in their earnings release as well.”