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Chapter 14 — Disclosure of Income Taxes

14.3 Income Statement

14.3 Income Statement

ASC 740-10
50-9 The significant components of income tax expense attributable to continuing operations for each year presented shall be disclosed in the financial statements or notes thereto. Those components would include, for example:
  1. Current tax expense (or benefit)
  2. Deferred tax expense (or benefit) (exclusive of the effects of other components listed below)
  3. Investment tax credits
  4. Government grants (to the extent recognized as a reduction of income tax expense)
  5. The benefits of operating loss carryforwards
  6. Tax expense that results from allocating certain tax benefits directly to contributed capital
  7. Adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity
  8. Adjustments of the beginning-of-the-year balance of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. For example, any acquisition-date income tax benefits or expenses recognized from changes in the acquirer’s valuation allowance for its previously existing deferred tax assets as a result of a business combination (see paragraph 805-740-30-3).
50-10 The amount of income tax expense (or benefit) allocated to continuing operations and the amounts separately allocated to other items (in accordance with the intraperiod tax allocation provisions of paragraphs 740-20-45-2 through 45-14 and 852-740-45-3) shall be disclosed for each year for which those items are presented.
50-11 The reported amount of income tax expense may differ from an expected amount based on statutory rates. The following guidance establishes the disclosure requirements for such situations and differs for public and nonpublic entities.
Public Entities
50-12 A public entity shall disclose a reconciliation using percentages or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. The statutory tax rates shall be the regular tax rates if there are alternative tax systems. The estimated amount and the nature of each significant reconciling item shall be disclosed.
Nonpublic Entities
50-13 A nonpublic entity shall disclose the nature of significant reconciling items but may omit a numerical reconciliation.
All Entities
50-14 If not otherwise evident from the disclosures required by this Section, all entities shall disclose the nature and effect of any other significant matters affecting comparability of information for all periods presented.
Related Implementation Guidance and Illustrations

Footnotes

1
This would apply to (or include) a tax inversion.