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Chapter 3 — Accounting Considerations Related to a Carve-Out Entity’s Statement of Comprehensive Income

3.5 Income Taxes

3.5 Income Taxes

It is critical for an entity to assess and understand the legal structure of the operations to be included in carve-out financial statements because it will be a primary factor for determining whether and, if so, how income taxes are accounted for in those financial statements.

Footnotes

1
An allocation of current and deferred taxes would also be required by SAB Topic 1.B.1 for the carve-out financial statements of certain nonmembers (i.e., divisions and lesser components of another entity) if such financial statements are to be filed with the SEC. See Deloitte’s Roadmap Income Taxes for additional guidance.