Income tax accounting refresh: equity method investments

Every Tuesday in May, Jennifer Spang is taking over the podcast to share the latest on income tax accounting — recent global and US tax policy developments, standard setting activity, and tax accounting considerations related to common transactions, such as business combinations and spin-offs.

To continue the series, Heather and Jenn are joined by Kassie Bauman, managing director in PwC’s National Office, to share insights on income tax accounting for equity method investments.

In this episode, you’ll hear discussion of:

• 1:31 - An overview of the equity method of accounting under GAAP for book purposes
• 6:21 - Book versus tax basis differences and when to record deferred taxes on equity method investments
• 8:52 - Income tax accounting implications when an investee becomes a subsidiary (or vice versa) through changes in ownership and control
• 13:43 - Income tax considerations related to equity method investments in partnerships, including the “look-through” policy election and inside and outside tax basis differences
• 25:45 - Final advice and common income tax questions on equity method investments

For more information, read our Equity method and Income taxes guides. Additionally, check out our prior podcasts, Part 1 and Part 2, on applying the equity method.

Jennifer Spang is PwC’s National Office income tax accounting leader, specializing in tax accounting under US GAAP and IFRS. She has over 25 years of experience helping companies in a variety of industries navigate complex tax accounting matters. 

Kassie Bauman is a managing director in PwC's National Office who consults on tax accounting under US GAAP and IFRS. Kassie has more than 20 years of auditing and accounting experience addressing complex technical accounting matters. 

Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.

Did you enjoy this episode? Text us your thoughts and be sure to include the episode name.