8-KOther Events

BANK OF AMERICA CORP /DE/ 8-K Report, Corporate Update (Dec 22, 2017)

Filed December 22, 2017For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) has filed an 8-K to address the expected impact of the recently enacted Tax Cuts and Jobs Act (Tax Act). The company estimates that the Tax Act will result in a reduction of approximately $3 billion to its net income for the fourth quarter of 2017. This reduction is primarily attributed to the lower valuation of certain net deferred tax assets, a consequence of the significant changes introduced by the new tax legislation. While the immediate impact on deferred tax assets is quantified, Bank of America continues to assess the broader implications of the Tax Act. This includes analyzing the new lower corporate tax rate and its potential effects on the company's financial statements and ongoing operations. Investors will receive the full financial results for the fourth quarter and full year 2017 on January 17, 2018, which will provide further clarity on the net impact.

Key Highlights

  • 1Bank of America (BAC) is reporting on the impact of the Tax Cuts and Jobs Act (Tax Act).
  • 2The company estimates a reduction of approximately $3 billion in net income for Q4 2017 due to the Tax Act.
  • 3The primary driver for the income reduction is a lower valuation of certain net deferred tax assets.
  • 4BAC is still evaluating the full effects of the Tax Act, including the new corporate tax rate.
  • 5The company plans to announce its Q4 and full-year 2017 financial results on January 17, 2018.

Frequently Asked Questions

Bank of America estimates a reduction of approximately $3 billion in net income for the fourth quarter of 2017 due to the Tax Cuts and Jobs Act. This is primarily driven by a lower valuation of certain net deferred tax assets.

Net deferred tax assets represent future tax benefits that a company expects to realize. In this context, the Tax Act's changes have likely reduced the present value or expected future value of these benefits, leading to a write-down.

Yes, the company is analyzing the impact of the new lower corporate tax rate on its financial statements and operations. While the immediate reported impact is on deferred tax assets, the lower corporate rate is expected to have a significant effect on future profitability.

Bank of America will announce its financial results for the quarter and year ended December 31, 2017, on January 17, 2018. This report will provide a more comprehensive view of the net effects of the Tax Act.