D.1 Background
The sample disclosures in this appendix reflect the accounting and
disclosure requirements outlined in SEC Regulation S-K, SEC Regulation S-X, and ASC
740 that are effective as of the date of this publication. SEC registrants should also
consider pronouncements that were issued or effective subsequently that may be
applicable to the financial statements, as well as other professional literature such as
AICPA audit and accounting guides.
Changing Lanes
In December 2023, the FASB issued ASU 2023-09, which establishes new income
tax disclosure requirements within ASC 740 in addition to modifying and
eliminating certain existing requirements. The ASU’s amendments are intended to
enhance the transparency and decision-usefulness of such disclosures. Under the
new guidance, PBEs must consistently categorize and provide greater
disaggregation of information in the rate reconciliation. The ASU also includes
additional disaggregation requirements related to income taxes paid. The ASU’s
disclosure requirements apply to all entities subject to ASC 740. PBEs must
apply the amendments 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 guidance.
For more information about ASU 2023-09, see Appendix B.
Note that the disclosure samples below have not been updated to reflect the ASU’s
requirements.