Dems call on FASB for more int’l disclosures
Thirteen Democratic senators have asked Financial Accounting Standards Board Chairman Russell Golden to require companies to break out more information on a country-by-country basis.
The senators, who include would-be presidential candidates Bernie Sanders and Elizabeth Warren, want companies to provide country-specific information on their income, assets, number of employees, and taxes paid.
FASB is in the midst of reviewing tax disclosure requirements, and the letter was in response to a revised exposure draft on the proposed Accounting Standards Update to Income Taxes (Topic 740).
“Public country-by-country disclosure is necessary for policymakers to examine economic trends and address important public policy issues,” the senators wrote. “For example, as Congress considers the effect of the recent international tax change, policymakers need to know whether – and how – the [Tax Cuts and Jobs Act] is encouraging tax avoidance. More complete disclosures will inform future policy debates and lead to better outcomes including potentially stronger, more sustainable markets.”
“There continues to be evidence of widespread, unsustainable corporate tax practices,” the letter continued. “A recent study found that 60 profitable Fortune 500 companies avoided all federal income tax in 2018. … The international community is headed in the direction of public country-by-country disclosure. By consensus, the G-20 countries have already adopted requirements that large companies provide the country-by-country information to tax authorities.”
The proposed ASU calls for less disclosure, the senators said, but they feel that’s a move in the wrong direction.
“Instead of moving forward with the scaled-back approach, we urge you to adopt revised rules that require companies to disclose – at a minimum – the information companies currently file with the IRS on the agency's country by country tax reporting document,” they concluded.
The full text of the letter is here.