Aug. 2010 -- A new law that includes changes to international tax provisions -- Public Law 111-226, signed on Aug. 10 -- could have significant financial reporting consequences for United States companies with foreign operations.

KPMG reports in its recent Defining Issues, the U.S. foreign tax credit provides relief from double taxation resulting from including foreign source income in the computation of U.S. tax obligations. The law could make repatriating earnings of foreign subsidiaries to the U.S. more costly for U.S. companies by limiting the ability to use foreign tax credits and could impact the measurement of incomes taxes for financial reporting pruposes.

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