Accounting for the income tax impacts of the One Big Beautiful Bill Act
ARTICLE | August 07, 2025
Authored by BT&Co.
The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, brings about a series of changes that significantly impact income tax provisions for corporations. This article provides a comprehensive overview of the effects of OBBBA on the face of financial statements and disclosures, particularly for periods that include the enactment date. Key changes to bonus depreciation, interest expense limitations, and domestic research and development expenses are highlighted, which are expected to reduce current taxable income in 2025.
The article also delves into the provisions of the Accounting Standards Codification (ASC) 740 in relation to the OBBBA. It explores how entities should account for changes in tax law during the period that includes the enactment date. It also sheds light on the impact of OBBBA on the estimated annual effective tax rate, deferred taxes, prior-year taxes, and valuation allowance adjustments. In essence, this article offers valuable insights into the implications of OBBBA for income tax accounting. To learn more about the effects of OBBBA on accounting for income taxes, click the link below.
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