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How can finance executives walk the tax reform tightrope?

Ernst & Young –

Making capital allocation decisions in light of US tax reform

The recent Tax Cuts and Jobs Act (the Act) will have immediate and long-term implications on capital structure, capital allocation and performance measurement and forecasting. These implications are primarily driven by a much lower nominal corporate tax rate, changes to credits and deductions for businesses and individuals, and a modified territorial system for overseas earnings. In this article we explore the questions finance executives should be asking about the impact of tax reform including:

  • How will the decrease in the corporate tax rate and limitation on the deductibility of interest expense affect our capital structure?
  • Does the Act affect only US debt?
  • How can we assess the right capital strategy for our company?

Read our full report to get answers to some of the top questions that finance executives should be considering.

Compliments of Ernst & Young – a member of the EACC in New York