Podcast: Transferable tax credits, by analogy

Podcast overview

One result of the Inflation Reduction Act is that companies now have the option to sell income tax credits in the open market for cash. And this new avenue for monetization has put us in uncharted accounting territory. US GAAP is silent on how to deal with tax credits that can either be used on a tax return or sold for cash.

So where does that leave us? Well, companies must now chart their own path by making a series of policy elections. Which brings us to our analogy – accounting for transferable tax credits is like going to an all-you-can-eat buffet of accounting policy choices. And not just any buffet, we’re talking about an extravagant Vegas-style spread – think lobster tails, prime rib and cascading chocolate fountains. The choices are seemingly endless!

Ashby Corum, Partner in charge of the Accounting for Income Taxes group in the KPMG Washington National Tax practice, joins as our first dinner guest. 

Applicability

• All entities

Podcast contents

• 00:00 – Introduction
• 4:35 – Income taxes or government grants, where to start?
• 7:20 – First course: income tax policy elections
• 11:40 – Second course: government grant policy elections
• 16:00 – Digesting what it means to your bottom line
• 17:40 – Dessert: statement of cash flows and disclosures
• 19:30 – Closing