In depth: Accounting for Pillar Two: Frequently asked questions

At a glance

This updated In depth includes our responses to frequently asked questions on US GAAP accounting considerations related to the implementation of Pillar Two.

Pillar Two tax legislation has been implemented in over 35 countries, with certain provisions becoming effective as of January 1, 2024. The objective of Pillar Two is for large multinational enterprises to pay a minimum level of tax (a threshold effective tax rate of 15%) on the income arising in each jurisdiction where they operate. This global minimum tax brings significant complexity in determining impacts on the income tax provision for interim and annual financial reporting in calendar year 2024 for many multinational reporting entities.

This In depth includes our responses to frequently asked questions on US GAAP accounting considerations related to the implementation of Pillar Two, including interim considerations applicable for calendar year end companies beginning in the first quarter of 2024, valuation allowance impacts, and other questions, and supplements In depth 2023-03, OECD Pillar Two: Time to act on the global minimum tax.

New questions on valuation allowance considerations have been added as of May 15, 2024. New questions are marked with the date added.