FDIC Alert! Proposed Revisions to the Consolidated Reports of Condition and Income (Call Reports) Related to Deferred Taxes and the Standardized Approach for Counterparty Credit Risk (SA-CCR)
The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, and the Office of the Comptroller of the Currency (collectively, the agencies), under the auspices of the Federal Financial Institutions Examination Council (FFIEC), are requesting comment on proposed revisions to clarify instructions for reporting of deferred tax assets consistent with a proposed rule on tax allocation agreements (see FIL-29-2021, dated April 22, 2021), and a new item related to the final rule on SA-CCR (see FIL-74-2019, dated December 2, 2019).
As described in detail in the Supplementary Information section of the Tax NPR, the agencies have determined that the derecognition by insured depository institutions of Deferred Tax Assets for Net Operating Loss or tax credit carryforwards in the Call Report raises significant supervisory and other concerns. Consistent with that determination, the agencies propose to revise the instructions to clarify that an institution must not derecognize Deferred Tax Assets for Net Operating Loss or tax credit carryforwards on its separate-entity regulatory reports prior to the time when such carryforwards are absorbed by the consolidated group.6
6 When an asset or liability is transferred outside the consolidated group, the institution would no longer recognize the associated DTA or DTL. The institution would include the tax consequences of the transaction in the calculation of its current period tax expense or benefit.
