descriptionIssue Brief Posted on: 7/15/2018

Tax Settlement Forecasting: The Best Response to Income Statement Volatility

Daniel Hunninghake Takis Makridis Fori Wang

Like it or not, corporate finance and tax teams are now responsible for forecasting excess tax benefits from stock-based compensation. FASB’s amendments to ASC 718 in ASU 2016-09 eliminated the APIC pool which previously buffered the income statement from volatility.

To help you face the challenge of predicting the future, here’s a refresher on the current deferred tax model, along with perspectives on the different ways a tax settlement forecasting process can be designed. We recently updated the 2016 issue brief initially published for evolving best practices and considerations.

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