In January, 2013, Golf-Travel formally opened its European operations, called Europe-Golf in Portmarnock, Ireland as a wholly owned subsidiary of Golf-Travel. During 2013, the subsidiarys performance exceeded expectations by hosting almost 400 individual golf trips and 200 corporate outings. At the end of the year, the subsidiary reported pretax income of 324,260 and the subsidiary paid Irish taxes of 40,533, leaving a net income of 283,727.

Requirements:

1/ Ben Watson has asked you, the companys CFO, to research the U. S. GAAP and provide a summary for the tax issues of earnings of foreign subsidiaries. Especially, he is interested in understanding the different financial reporting issues of a strategy that remits the earnings back to the United States versus a strategy of permanently reinvesting the earnings back into the Irish subsidiary.

2/ What would be your answers to the issues in Requirement 1 if it is under IFRS?

Provide proper references from FASB Codification and from IFRS in proper form