14.1 Overview

This chapter outlines the income tax accounting disclosures that entities are required to provide in the notes to, and on the face of, the financial statements. Appendix D provides disclosure examples that may be helpful as the requirements outlined in this chapter are considered. Disclosure requirements related to certain special areas are addressed in other chapters of this Roadmap as follows:

Chapter 7 — interim tax reporting.
Chapter 8 — separate or carve-out financial statements (including abbreviated separate or carve-out financial statements).
Chapter 11 — the effects of a business combination on an entity’s valuation allowance.
Chapter 12 — noncontrolling interests, equity method investments, and QAHP investments, including specific exceptions in ASC 740 related to corporate joint ventures and changes in ownership of investees.

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 also replaces the term “public entity” throughout ASC 740 with the term “public business entity” as defined in the ASC master glossary. 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.

The disclosure guidance reproduced from ASC 740 reflects the requirements both before the adoption of ASU 2023-09 and (as pending content) after its adoption. However, the discussions in this chapter are based on the guidance before the adoption of ASU 2023-09. For more information about the ASU’s enhanced disclosure requirements, see Appendix B.

Confidential and Proprietary — for Use Solely by Authorized Personnel

This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.