In our Toolkit podcast series, we are taking a deep dive into one accounting topic each month that goes beyond the basics and into areas that require judgment. This month, we are covering income taxes–a multifaceted area that generates numerous technical questions.

In this episode, Heather Horn was joined by Jenn Spang and Kassie Bauman from PwC’s National Office to discuss the accounting guidance for divestitures, focusing on some of the primary judgments.

In this episode, you will hear:

• 4:06 - Considerations during the period of time that a company is contemplating a divestiture
• 8:38 - Key judgments when assessing valuation allowances before a divestiture is classified as held-for-sale
• 17:56 - How the timing of deferred tax liability reversals could impact valuation allowances
• 20:26 - Held-for-sale accounting: how to determine whether deferred taxes are included in the disposal group
• 28:32 - Financial statement presentation considerations for after the divestiture has occurred
• 42:20 - Additional focus areas to keep in mind for successful divestiture tax accounting

Want to learn more? Listen to our previous podcast, Working with uncertain tax positions, and read about how a disposal impacts Valuation allowances in our Income taxes guide.

Jenn Spang is a partner in PwC’s National Office and serves as the 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, including significant experience addressing complex technical accounting matters as part of the firm’s National Office.

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 [email protected].

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