Since the February 2026 U.S. Supreme Court decision in Learning Resources, Inc. v. Trump (Learning Resources), significant questions have arisen about how entities should account for potential refunds of tariffs paid under International Emergency Economic Powers Act (IEEPA).
Subsequent proceedings by the Court of International Trade (CIT) and the launching of Phase 1 of U.S. Customs and Border Protection’s (CBP) new Consolidated Administration and Processing of Entries (CAPE) tool have brought some clarity to this issue. However, due to uncertainty concerning the administration’s potential appeal of CIT rulings mandating refunds of certain IEEPA tariffs, ambiguity remains concerning the timing and amount of refunds.
Our Accounting Brief: Q1 2026 IEEPA tariff reporting considerations , addresses the relevant accounting topics for entities to consider as they prepare for quarterly reporting. The publication updates the status of the various legal proceedings related to the refund of IEEPA tariffs and provides an update on CBP’s CAPE tool.
The publication also provides further guidance for entities contemplating the recognition of a receivable for refunds of tariffs paid under either ASC 450-30’s gain contingency model and ASC 410-30’s loss recovery model. It also describes the Phase 1 release of CAPE and the expectations for subsequent phases of CAPE.
Lastly, the publication provides guidance on certain follow-on impacts of tariff refunds, including the accounting by vendors for potential tariff-related refunds to customers.
Due to uncertainty in the timing of tariff refunds, entities may be exploring offers to monetize them by selling the rights to the refunds to third parties. These transactions also raise complex questions concerning how to account for both the initial receipt of proceeds and subsequent accounting for resulting obligations under such arrangements. Our publication provides guidance for entities as they contemplate monetizing their refund rights.
This publication is an update to, and should be considered in combination with, our March 2026 Accounting Briefs, Financial reporting implications of tariffs and Update on potential tariff refunds.
