FASB ISSUES PROPOSED IMPROVEMENTS TO DISCLOSURE REQUIREMENTS FOR INCOME TAXES
Norwalk, CT, July 26, 2016—The Financial Accounting Standards Board (FASB) today issued a proposed Accounting Standards Update
(ASU) that is intended to enhance disclosure requirements on income
taxes. Stakeholders are encouraged to review and provide comment on the
proposal by September 30, 2016.
The proposed ASU is part of the FASB's broader disclosure framework
project to improve the effectiveness of disclosures in notes to
financial statements by clearly communicating the information that is
most important to users of a reporting organization's financial
statements.
The proposed ASU would both modify existing disclosure requirements and
provide additional disclosure requirements for income taxes. These
modifications and additions include describing an enacted change in tax
law, disaggregating certain income tax information between foreign and
domestic, and explaining the circumstances that caused a change in
assertion about the indefinite reinvestment of undistributed foreign
earnings. It also will require disclosing the aggregate of cash, cash
equivalents, and marketable securities held by foreign subsidiaries.
The proposed ASU differentiates disclosure requirements for public business entities as defined in the Master Glossary of the FASB Accounting Standards Codification® and for organizations other than public business entities.
Income taxes is one of four areas where the Board is evaluating
improvements to existing disclosure requirements. Other areas the Board
is addressing include an employer's disclosure of defined benefit
plans, fair value, and inventory.
The proposed ASU—and a high-level FASB in Focus overview—is available at www.fasb.org.
About the Financial Accounting Standards Board
Established in 1973, the FASB is the independent, private-sector,
not-for-profit organization based in Norwalk, Connecticut, that
establishes financial accounting and reporting standards for public and
private companies and not-for-profit organizations that follow Generally
Accepted Accounting Principles (GAAP). The FASB is recognized by the
Securities and Exchange Commission as the designated accounting standard
setter for public companies. FASB standards are recognized as
authoritative by many other organizations, including state Boards of
Accountancy and the American Institute of CPAs (AICPA). The FASB
develops and issues financial accounting standards through a transparent
and inclusive process intended to promote financial reporting that
provides useful information to investors and others who use financial
reports. The Financial Accounting Foundation (FAF) supports and oversees
the FASB. For more information, visit www.fasb.org.