Heads Up — Keep it simple: FASB issues ASU on income taxes
Published on:
19 Dec 2019
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This Heads Up summarizes the FASB’s recently issued Accounting Standards Update (ASU) No. 2019-12, Simplifying the Accounting for Income Taxes. The ASU enhances and simplifies various aspects of the income tax accounting guidance in ASC 740, including requirements related to the following:
- Hybrid tax regimes.
- The tax basis step-up in goodwill obtained in a transaction that is not a business combination.
- Separate financial statements of entities not subject to tax.
- The intraperiod tax allocation exception to the incremental approach.
- Ownership changes in investments — changes from a subsidiary to an equity method investment (and vice versa).
- Interim-period accounting for enacted changes in tax law.
- The year-to-date loss limitation in interim-period tax accounting.
