Investor Group Seeks FASB Change to Simplify NMTC Investment

Friday, February 5, 2021 - 2:45pm

The PNC Financial Services Group submitted a letter this week to the Financial Accounting Standards Board (FASB) asking FASB to consider expanding its current accounting guidance covering low-income housing tax credit (LIHTC) investment to apply to new markets tax credit (NMTC) investments. Current guidance requires reporting entities to present the depletion of NMTC investments as an expense in their pre-tax income, while recognizing the economic benefit of the investment  below pre-tax income as a reduction to income tax expense. The PNC letter suggests current guidance complicates NMTC investment accounting and suggests simplifying the guidance to cover all tax credit investments. FASB published PNC’s letter as one of three agenda requests submitted in 2021.