B.1 Overview
In December 2023, the FASB issued ASU 2023-09, which establishes new income tax
disclosure requirements in addition to modifying and eliminating certain existing
requirements. Under the new guidance, entities must consistently categorize and provide
greater disaggregation of information in the rate reconciliation. They must also further
disaggregate income taxes paid.
The ASU’s disclosure requirements apply to all entities subject to ASC
740. As the FASB notes in ASC 740-10-50-11A (added by the ASU), the “objective of these
disclosure requirements is for an entity, particularly an entity operating in multiple
jurisdictions, to disclose sufficient information to enable users of financial
statements to understand the nature and magnitude of factors contributing to the
difference between the effective tax rate and the statutory tax rate.”
PBEs must apply the ASU’s guidance to annual periods beginning after December 15, 2024
(2025 for calendar-year-end PBEs). Entities other than PBEs have an additional year to
adopt the ASU.