Tax Settlement Forecasting: The Best Response to Income Statement Volatility

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.