The Wall Street Journal: Shell, Barclays To Take Billions In Charges Thanks To U.S. Tax Law

LONDON — Royal Dutch Shell PLC and Barclays Bank PLC said they would take large charges attributable to the U.S. tax overhaul — joining a parade of global firms in recent days disclosing how American tax-bill changes will affect their bottom line.

Shell RDSB, -0.20%   estimated its U.S. tax-related charge in the fourth quarter could amount to between $2 billion and $2.5 billion, stemming from a reduction in the value of its deferred tax assets. Companies can log such assets during unprofitable periods and can use them to offset future tax payments. Those assets — essentially credits toward future tax payments in the U.S. — are worth less on paper after the tax overhaul sharply reduced headline corporate tax from 35% to 21%.

Barclays BARC, +0.05%  , meanwhile, said it would take a noncash charge of £1 billion ($1.3 billion) in the fourth quarter, citing similar changes in the value of its deferred tax assets and liabilities. The charge, combined with other restructuring costs, is expected to push the U.K. bank to a net loss for the year. Barclays also said its capital ratio, a key measure of balance-sheet strength, will fall by 0.2 percentage point — though that would likely be too small to worry investors.

Both companies said that despite the big paper losses, they viewed the drop in U.S. corporate taxes as a positive in the longer run.

An expanded version of this report appears on WSJ.com.

Also popular on WSJ.com:

Homeowners rush to prepay 2018 property-tax bills.

Tax law could further slow down a bank favorite: Jumbo mortgages.

RECENT NEWS

Gyrostat Capital Management: The Hidden Architecture Of Consequences

When Structures Themselves Become A Risk In portfolio construction, risk is rarely where we look for it.... Read more

Gyrostat November Outlook: The Rising Cost Of Doing Nothing

Through the second half of 2025, markets have delivered a curious mix of surface tranquillity and instabi... Read more

Gyrostat Capital Management: Blending Managers - From Style Diversification To Scenario Diversification

The Limits of Traditional Diversification For decades, portfolio construction has ... Read more

Gyrostat October Outlook: Beneath The Calm, The Cost Of Protection Rises

 Even as global equity indices remain near record highs, the pricing of risk is shifting quietly ben... Read more

Gyrostat Capital Management: Solving The Nastiest Problem In Finance

Retirement Income and Sequencing Risk Executive Summary ... Read more