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Chamber Flags Financial Reporting Delays Due to Tax Overhaul

Image: Chamber Flags Financial Reporting Delays Due to Tax Overhaul
(Dollar Photo Club)

Thursday, 21 December 2017 03:53 PM

Some U.S. listed companies may struggle to file their annual financial reports on time because the Republican-led overhaul of the country’s tax system may prompt a raft of additional disclosures, the U.S. Chamber of Commerce warned on Thursday.

In a letter to Securities and Exchange Commission (SEC) Chairman Jay Clayton, the Chamber highlighted the extensive analysis the bill will require of many companies and asked for guidance on the circumstances in which a filing delay may be acceptable.

The Republican-controlled U.S. House of Representatives gave final approval on Wednesday to the biggest overhaul of the U.S. tax code in 30 years, sending a sweeping $1.5 trillion tax bill to President Donald Trump for his signature.

The bill significantly lowers the income tax rate for U.S. companies, allows them to repatriate cash from overseas, and modifies numerous deductions, among other changes.

The bill will significantly affect many companies’ year-end financial statements because listing rules oblige them to flag any potential material risks or changes to their operations and financial outlook to shareholders.

Reuters reported on Thursday that refiners and pipeline companies are likely to embark on a capital spending spree due to the bill, while it will hurt debt-laden companies and potentially increase banks’ short-term funding costs.

For companies with fiscal years ending Dec. 31, getting the necessary analysis done in time could be tough, the Chamber said.

“Companies may encounter difficulties in quantifying the impact of the new law, which could in turn lead to potential delays in filing periodic SEC reports on a timely basis,” Neil Bradley, senior vice president and chief policy officer at the Chamber, wrote.

“In this situation, we believe issuers and investors alike would benefit if the Commission or SEC staff provided guidance on the circumstances under which a delay in reporting may be appropriate, and the appropriate process to follow,” he added.

A spokesman for Clayton was not available for comment.

© 2018 Thomson/Reuters. All rights reserved.

   
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Some U.S. listed companies may struggle to file their annual financial reports on time because the Republican-led overhaul of the country’s tax system may prompt a raft of additional disclosures, the U.S. Chamber of Commerce warned on Thursday.
chamber, financial, reporting, delays, tax, overhaul
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Thursday, 21 December 2017 03:53 PM
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