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Heads Up — Keep it simple: FASB issues ASU on income taxes

Published on: 19 Dec 2019

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.

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