TBBS: an Increasingly Important Internal Control

Tax basis balance sheets (“TBBS”) are a foundational part of any tax department’s controls. While invaluable for supporting tax positions for financial reporting, without proper maintenance these critical workpapers can quickly develop inaccuracies. More and more utilities are finding that their tax basis balance sheet controls are insufficient, and without proper automation, this can lead to an immense and recurring manual effort for tax departments looking to preserve reliable tax accounting records.

Capitalization of Cloud Computing Costs

Moving data, applications and platforms to the cloud creates substantial business benefits as companies reduce capital expense outlays while maintaining a more flexible IT environment. Though the advantages are numerous, companies pursuing cloud computing solutions need to consider the financial reporting implications as well as broader tax and IT considerations that result from recent guidance on accounting standards effective in 2020 for public business entities.

Utilities closely watching FERC ADIT reporting requirements

Comment letters are in, and the waiting game has begun.

On November 15, 2018, FERC initiated RM19-5, a Notice of Proposed Rulemaking that addresses how electric transmission providers, natural gas utilities, and pipelines must reflect the accounting and reporting of excess deferred income taxes resulting from the Tax Cuts and Jobs Act of 2017. Comment letters were due by January 22, 2019.

Implications of 163(j) for utilities

On Monday, November 26, 2018, the Treasury Department published proposed regulations relating to section 163(j), as amended by the Tax Cuts and Jobs Act. For utilities with regulated operations (excepted trade or business) and non-regulated operations (non-excepted trade or business), the proposed regulations provide additional clarity regarding the applicability of the interest limitation on the consolidated group.