Levi’s Intriguing New Tariff Disclosure

Clothing maker Levi Strauss & Co. ($LEVI) filed its latest earnings report earlier this week with an intriguing new disclosure about tariff costs. Analysts might want to take a look here, since we may see more such disclosures from other companies as Q1 earnings releases start arriving later this month.

Levi’s filed its earnings report (for the quarter ending March 1) on April 7, and overall the income statement numbers looked solid. Revenue up 14.1 percent from the year-ago period, operating income up 3.7 percent, net income up 30.2 percent thanks to a big boost on the always-popular “Other Income” line item. In short, the jeans looked fabulous. 

Instead, our analytics eye drifted to Levi’s footnote disclosures, and we found this fascinating nugget in Levi’s Commitments and Contingencies footnote:

On February 20, 2026, a U.S. Supreme Court ruling invalidated tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). The Company estimates it has paid approximately $80 million under the IEEPA tariffs. The ruling did not address potential refunds, creating uncertainty regarding the potential recovery of tariffs previously assessed under that statute. As of March 1, 2026, the Company has not recognized an asset related to the potential refund. The Company will continue to evaluate new information and will recognize the refund when the requirements under ASC 450, Contingencies, have been met.

This is one of the first examples we’ve seen of a company disclosing specific tariff amounts that it has actually paid, and which the company might therefore recoup in some sort of tariff refund process. 

Whether tariff refunds will ever come to pass is still anyone’s guess. The Supreme Court ruling didn’t address that issue, and while multiple companies have now filed lawsuits against the Trump Administration to get that tariff money refunded, the timing and mechanisms for possible refunds are unclear.

Still, companies might receive tariff refunds at some point — and as Levi’s $80 million disclosure shows, those refunds could be a material amount of money. (The $80 million in tariff payments equals 13.8 percent of Levi’s $578.1 million in net income for fiscal 2025.) 

Since the Supreme Court ruling arrived on Feb. 20, smack in the middle of Q1, presumably we’ll see more companies discussing its possible implications in Q1 earnings reports that are starting to arrive just now.

There’s no guarantee filers will disclose specific tariff numbers, or indeed say anything about the issue at all. Delta Air Lines ($DAL), for example, filed its Q1 earnings report this week and said nothing on the issue. 

How to Find This Stuff

One way to find these disclosures will be to open the Disclosures and Footnotes Query page and then search for relevant snatches of text. 

For example, we searched for “IEEPA” (the acronym for the tariff law that the Supreme Court overturned) in filings from S&P 500 firms submitted since Feb. 23, 2026, the first business day after the ruling. We found 24 mentions.

Spoiler: almost all those mentions were boilerplate that didn’t include any specific amounts.

For example, in a filing from March 19, FedEx ($FDX) included a statement in its Contingencies footnote that, yes, the tariffs had been overturned; and even mentioned that FedEx has filed a lawsuit against the Trump Administration to get its money back. But FedEx didn’t provide any dollar amounts, instead only saying, “No adjustments have been recorded in the accompanying unaudited condensed consolidated financial statements as we cannot reasonably estimate the financial impact; however, it is reasonably possible that it could be material.”

On the other hand, Nike ($NKE) made a filing on April 1 that did say the company has paid $1 billion in tariffs, but since there’s no easy mechanism to seek a refund and litigation is likely to be long, “As such, we have determined that potential recovery of any funds is not probable.” 

Most filers that have mentioned the IEEPA tariffs so far have simply said the matter remains so unclear that they’ll just continue to monitor the situation and provide further updates as warranted.

Accounting for Tariff Refunds

Per that disclosure from Levi’s, the rules for when a company can realize potential gains are addressed in a piece of accounting arcana known as ASC 450, the accounting rule for contingencies. Simply put, a company can’t record a contingent gain until that gain is “realizable” — which is a considerably higher bar than when a company is supposed to recognize a contingent loss. 

Losses should be recognized when they are both probable and estimable, to keep investors forewarned about potential costs. Companies are even supposed to update their estimates on contingent losses from one period to the next as those situations (say, a lawsuit proceeding through litigation) become more clear. Hence we have examples such as Netflix ($NFLX) and its huge litigation loss reported last year, which actually had been growing larger and larger for the prior 18 months. 

Contingent gains do not work like that. Companies must be far more certain that the money is in the bag before they can book it as a one-time item. 

So yes, we might see more companies following Levi’s lead and reporting how much money they paid in tariffs — but we’re still a long ways off from moving those numbers into the income statement, if ever.