Tariffs aren’t the only major news coming out of Washington this month. You may have heard about a little thing called the “One Big Beautiful Bill Act,” which President Trump signed into law on July 4. The potential impacts of this legislation on certain industries (like energy, real estate, semiconductors, EVs, defense and manufacturing more broadly) have been widely reported. For companies in these industries (and any others I missed), the bill will be a major topic of discussion on earnings calls and in 10-Q and earnings release disclosures. At least one company has already publicly addressed the potential impacts of the bill on its business.

But, as you know, the legislation also has significant business tax provisions that, according to the many memos we’ve already posted, are expected to impact virtually every business in the country. And these tax provisions (see this interactive table) come with accounting and disclosure implications. BDO has this to say about the accounting implications generally:

The legislative changes will affect income tax accounting in accordance with Accounting Standards Codification (ASC) 740, Income Taxes. Notable corporate provisions include the restoration of 100% bonus depreciation; the creation of Section 174A, which reinstates expensing for domestic research and experimental (R&E) expenditures; modifications to Section 163(j) interest limitations; updates to the rules for global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII); amendments to the rules for energy credits; and the expansion of Section 162(m) aggregation requirements.

Those provisions could have important implications for the calculation of current and deferred taxes, including the assessment of valuation allowances. However, because the bill was signed after the June 30 period-end and its provisions have varying effective dates, only some changes – such as those affecting valuation allowance assessments – might affect the current year’s financial statements.

The alert goes on to discuss accounting considerations — including assessing the impact on income tax provision calculations (including current and deferred tax balances), the estimated annual effective tax rate and valuation allowances — some of which may be relevant in the near term to the upcoming second-quarter 10-Q for calendar-year filers. Here’s what it has to say about related disclosures.

Companies need to consider disclosing the expected effects of new tax laws in the notes to the financial statements, management’s discussion and analysis, and risk factors.

If a law is enacted after the interim balance sheet date but before financial statements are issued, the tax law change would be considered a Type II nonrecognized subsequent event under ASC 855, Subsequent Events. In that case, companies must disclose the nature of the event and either estimate its effect (if material) or state that an estimate cannot be made. If a law is enacted during an interim period, major variations in the relationship between income tax expense and pretax income must be explained.

– Meredith Ervine