How to forecast and report on OBBBA capital investments

With the One Big Beautiful Bill Act (OBBBA) changing the economics and timing of many investments, middle market leaders have more to evaluate than just available tax benefits. They need to understand what various initiatives may cost, how they could be financed and how long it may take to produce the expected returns.

Financial reporting should be part of that discussion while capital allocation decisions are still taking shape. A multiyear forecast can show how a proposed investment may affect financial results over time while giving operations, finance, tax and reporting professionals a common set of assumptions to examine.

“The companies that are making the best decisions have the right stakeholders in the room,” says Mike Cahill, a partner in RSM’s finance and accounting advisory practice. “And generally, all of them are up to speed on the tax benefits as well as the finance and operations implications.”

Before committing capital, leaders can ask the team to model the initiative over the period when its returns are expected to emerge. The analysis should show what happens if costs rise, execution takes longer or expected revenue arrives on a different schedule. It should also reflect financing costs and operating conditions alongside the investment’s tax treatment.

How project acceleration and financing strategy impact financial statements

Financing choices can alter the economics that made an investment attractive in the first place.

RSM’s Q2 2026 Middle Market Business Index (MMBI) survey found that 59% of executives familiar with the OBBBA plan to increase capital investment over the next three years because the law restored and expanded immediate expensing of some depreciable property. Among those executives, 70% expect most of their increased capital spending volume to result from moving planned projects forward rather than newly conceived investments.

Accelerating planned projects may require a business to use available cash, issue debt or raise equity earlier than planned.

If the business plans to borrow, for example, an analysis incorporating the cost and timing of the debt, its effect on leverage and potential pressure on existing borrowing covenants can show whether financing changes the project’s expected returns or its fit within the company’s capital plans.

Expected returns introduce another set of judgments. Forecasts may need to estimate when the project will begin producing cash flows and how those cash flows will develop. The projections used to support the investment should be consistently used in valuations, fair value estimates and impairment analyses required by accounting standards.

The forecast also needs a reasonable basis for the project’s growth and expected returns, especially when funding remains costly.

“There needs to be some forecast and assumptions built in that are supportable to show the growth and the expectation for how that returns on capital will be realized,” says Cahill.

Finance leaders can identify which reporting analyses rely on the project’s cash flow assumptions and assign responsibility for keeping those inputs consistent. Changes in expected revenue or project timing should be reflected in each affected model rather than appearing in one while remaining absent from another.

Aligning financial projections with operational milestone changes

Investment plans change. Projects accelerate or slip. Costs rise. Expected revenue arrives on a different schedule. Each development can alter the forecast and the accounting estimates derived from it.

The people closest to the initiative often see those changes first. A revised construction schedule, for example, may affect the timing of spending and expected returns. That information needs a defined path from the operating team to financial planning and analysis (FP&A), treasury, tax and financial reporting.

Without that visibility, the financial effects may first become apparent at period-end. Darian Harnish, a partner in RSM’s Washington National Tax income tax accounting practice, says some companies are “catching costs as they come into the P&L (profit and loss) at month-end rather than having a faster view of those things.”

Companies can establish a regular process for communicating developments that affect the forecast, including what changed, why it changed and which assumptions require revision.

Designating an owner for the forecast creates a clear point of accountability. Documenting the assumptions behind a major investment helps that owner trace a revision through the companywide forecast and the reporting estimates that depend on it.

Cassie Conley, an RSM corporate tax partner who specializes in accounting for income taxes, points to the interim tax provision as one example: “The provision is only as good as the forecast. If the forecast is wrong, the provision is wrong too.”

The same principle applies when projected performance supports valuations, impairment analyses or other estimates. At each reporting period, finance leaders can evaluate whether the forecast continues to reflect the business’s expectations for the initiative’s performance. If expectations have changed, the related models should change with them.

Measuring actual project performance against the original business case

As an initiative moves forward, forecast updates should explain not only how the numbers changed, but also why. They should identify which assumptions changed and whether the cause arose from project execution, financing costs, demand or other external conditions.

That distinction informs what happens next. A timing delay may require an updated forecast without changing the underlying investment case. A sustained change in demand could affect the expected returns or the amount of capital the company remains willing to commit. Higher financing costs may change the project’s place within the broader investment portfolio.

Leaders can revisit the original business case when a major investment reaches an established milestone. Comparing actual performance with the forecast can show whether execution differed from the plan and which assumptions proved reliable. The findings can guide adjustments to the initiative and improve the way the company evaluates future investments.

The OBBBA may improve the economics of an initiative or encourage a business to act sooner. Forecasts and financial results show what happens after that incentive enters the decision. The lessons learned can sharpen the organization’s next capital allocation decision.