A group of 16 members of the US Congress have sent a letter to the Financial Accounting and Standards Board (FASB) asking it to require multinational companies (MNCs) to disclose more country-by-country reporting data in their public financial statements. The move comes in the midst of a rollout of country-by-country reporting requirements by the Internal Revenue Service (IRS) aimed at tackling base erosion and profit shifting.
“In order to address the threat posed by offshore profit shifting to investors and the public, we urge the Board to require multinational corporations to disclose their income, assets, number of employees, and taxes paid on an annual, country-by-country basis,” the lawmakers wrote in a letter to FASB chair Russell Golden on Tuesday. “These standards will implement critical safeguards and mitigate risk for investors and provide policymakers and the public with important data relevant to our national well-being. Companies already use this information internally and report much of it to the IRS, mitigating any alleged compliance burdens associated with such a directive.”
If implemented by the FASB, this regulation will place further strain on finance functions in MNCs with even more detailed reporting requirements with which to comply. The workload is exacerbated if this reporting must be completed manually or if the financial process automation and reporting tools used by the MNC cannot effectively allocate costs and revenue on a country-by-country basis.
Having worked with multinationals around the globe for 27 years, SoftCo’s financial process automation and financial reporting solutions come with country-by-country cost (AP Automation), revenue (AR eInvoicing) allocation, and tax reporting as standard.
“In the case of cost allocation, we can easily split a single supplier invoice and allocate the costs to multiple countries and cost centers. This ensures that when company-wide reports are generated, the total costs associated with each entity are accurate and up-to-date and the resulting financial statements are fully compliant.”
Garret Pearse, Senior Consultant, SoftCo
If you would like to learn more about SoftCo’s financial process automation and reporting solutions, contact us on email@example.com.