KPMG report: Accounting for One Big Beautiful Bill Act—key policies to review after enactment
This article highlights certain accounting policy and other considerations when accounting for the changes in the One Big Beautiful Bill Act.
On July 4, 2025, President Trump signed into law H.R. 1, the budget reconciliation bill known as the “One Big Beautiful Bill” (Pub. L. No. 119-21). ASC 740, Income Taxes, requires the tax effect of changes in tax laws to be recognized in the period that includes the enactment date. Consequently, entities are undertaking a review of existing accounting policies or establishing new accounting policies related to accounting for income taxes. This report delves into considerations for accounting policy choices in various scenarios to assist organizations in making informed decisions. Discussion and detailed examples are provided regarding the following situations:
- Accounting policy considerations for effects of the corporate alternative minimum tax (CAMT) in the valuation allowance assessment,
- Accounting policy considerations when performing valuation allowance assessments on deferred tax assets for interest carryforwards,
- Accounting policy to use the enactment date or beginning-of-year deferred taxes in determining interim period income taxes consequences, and
- Repeal of the tax election for a one-month deferral of the tax year of specified foreign corporations.
Read a September 2025 report prepared by KPMG LLP that highlights selected items included in the bill and discusses some related accounting for income taxes implications, but it is not all inclusive. This report is based on our current understanding of the bill’s tax law provisions and our analysis to date. Certain of the tax law provisions require interpretation, which may be clarified in future guidance from the U.S. Treasury, including regulations or sub-regulatory guidance.