When the U.S. Supreme Court struck down tariffs that the Trump administration had imposed under the International Emergency Economic Powers Act (IEEPA) on February 20, it set in motion a change to how corporate tax and trade departments had to account for the tariffs their organizations were facing.

Now, six months later, the accounting for the refunds of previous tariffs moves forward even without a formal method to claim these or any guidance from federal tax and trade authorities. That's leading many companies to apply different accounting models, again, often without guidance.

Same ruling, three different accounting answers

For example, several companies facing similar situations each opted for difference accounting solutions.

Ouster, a digital 3D technology company, elected the gain contingency model under ASC 450-30. Under that approach, the company recognized no benefit until the U.S. Customs and Border Protection (CBP) formally accepted its refund claim. Once that happened, Ouster booked $5.4 million in cost of sales, limited strictly to amounts already paid and previously recorded.

Another company, FIGS, a medical uniform retailer, used cost recovery guidance instead. Once the CBP accepted its submitted claims, the company concluded recovery was probable and it could reasonably estimate it, booking a $16 million receivable for the remaining accepted amount before actually collecting the cash.

Finally, power engine maker Power Solutions International (PSI) shows a related but distinct wrinkle. PSI received $22.7 million in refunds during a recent quarter but recorded the full amount as a customer refund liability rather than income, because it hadn't yet determined how much of that money would need to be passed back to its own customers.

The experiences of these three companies are not a competing interpretation of the same accounting question so much as a separate judgment call layered on top of it. However, it all points at the same underlying problem: The guidance (or lack of it) leaves real room for management discretion.

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Ouster and FIGS are the cleaner apples-to-apples comparison. Same ruling, same quarter, two different recognition models, two different answers.

The starkest version of this gap shows up in capitalization treatment. A manufacturer that capitalized $50 million of IEEPA tariffs into inventory at year-end could recognize a $50 million asset under a broad reading of the guidance, or nothing at all under a narrow one. No authoritative body has resolved which reading is correct. In fact, VF Corp.'s own Form 10-K shows the split inside a single company: $93.8 million recorded as a reduction to cost of goods sold, while $55.9 million stayed in inventory, to be recognized only when that inventory is eventually sold.

Same fact pattern, materially different balance sheets, all depending on which policy a company's technical accounting team chose to apply.

Why the timing keeps shifting

Part of the mess traces back to a refund process that was rolled out in phases. The Court of International Trade ordered the CBP to proceed with refunds on March 4. CBP responded two days later, saying immediate reprocessing of every affected import was not operationally feasible, and targeted a new system for deployment within about 45 days. That system, known as CAPE, opened for claims on April 20. A second phase began at the end of June.

That staggered rollout explains why disclosures from the same quarter can look so different. Capstone Holding, for example, recorded a $438,000 refund receivable as of June 30 but hadn't yet received the cash; by mid-August, Capstone had collected just $99,000 of it. Another company, Capri Holdings, had collected $49 million by the end of July; and home furnishing maker Arhaus had received $37.8 million plus $1.3 million in interest by early August.

None of these numbers are wrong. They simply reflect different points in the same multi-phase process, which makes period-over-period comparability an audit issue on its own.

The unwind is colliding with new tariffs

Just as refund machinery got underway, new tariffs arrived to complicate it. On July 23, the U.S. Trade Representative imposed fresh Section 301 tariffs on 60 economies over forced-labor enforcement failures. These new tariffs were effective the following day, the same day an earlier round of Section 122 tariffs expired

That means, companies are now simultaneously collecting refunds on tariffs that were struck down and absorbing new tariffs just imposed, sometimes on overlapping product lines. Trade press coverage from mid-July put it plainly: Refunds are flowing, but the threat of further tariffs had clouded the picture for companies and their accountants.

For an in-house or outside auditor, that means the refund story can't be tested in isolation. An organization's tariff exposure needs to be evaluated as a moving target, not a one-time cleanup item closed out once a refund check clears.

For more on the impact of tariffs on global trade, you can download a full copy of the Thomson Reuters Institute’s recent 2026 Global Trade Report here‍