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FASB proposes improvements to income tax disclosures

  • FASB document Image

Jul 26, 2016

As part of its disclosure framework project, the FASB has issued a proposed Accounting Standards Update (ASU), “Disclosure Framework — Changes to the Disclosure Requirements for Income Taxes.”

The pro­posed ASU requires all entities to provide the following disclosures:

  • “Description of an enacted change in tax law that is probable to have an effect on the reporting entity in a future period.”
  • “Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign.”
  • “Income tax expense (or benefit) from continuing operations disaggregated between domestic and foreign.”
  • “Income taxes paid disaggregated between domestic and foreign, and the amount of income taxes paid to any country that is significant to total income taxes paid.”
  • “An explanation of circumstances that caused a change in assertion about the indefinite reinvestment of undistributed foreign earnings and the corresponding amount of those earnings.”
  • “The aggregate of cash, cash equivalents, and marketable securities held by foreign subsidiaries.”

In addition, the following disclosure requirements would apply only to public business entities:

  • “Within the reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period, settlements using existing deferred tax assets separate from those that have been or will be settled in cash.”
  • “The line items in the statement of financial position in which the unrecognized tax benefits are presented and the related amounts of such unrecognized tax benefits. If the unrecognized tax benefits are not presented in the statement of financial position, those amounts should be disclosed separately.”
  • “The amount and explanation of the valuation allowance recognized and/or released during the reporting period.”
  • “The total amount of unrecognized tax benefits that offsets the deferred tax assets for carryforwards.”

Com­ments on the pro­pos­al are due by September 30, 2016. For more in­for­ma­tion, see Deloitte's related Heads Up newsletter as well as the press release, FASB in Focus newslet­ter, and proposed ASU on the FASB’s Web site. 

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