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FASB issues ASU simplifying balance sheet classification of deferred taxes

  • FASB (US Financial Accounting Standards Board) (lt blue) Image

Nov 20, 2015

On November 20, 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” as part of its simplification initiative (i.e., the Board’s effort to reduce the cost and complexity of certain aspects of U.S. GAAP). Under the ASU, organizations that present a classified balance sheet are required to classify all deferred taxes as non-current assets or non-current liabilities.

The new standard will align the presentation of deferred income tax and liabilities with IFRS, which requires deferred tax assets and liabilities to be classified as non-current in a classified statement of financial position.

For public business entities, the ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the ASU is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018.

For more information, see the media advisory and the ASU on the FASB’s Web site.

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