ASU 2023-09 & ASC 740: New Income Tax Disclosures, Rate Reconciliation and Income Taxes Paid Guidelines

This webinar will address the recent Accounting Standards Update, ASU 2023-09. Our panel of accounting and assurance veterans will explain the new income tax disclosure requirements and provide comprehensive examples using real world scenarios of its application.

In December 2023, FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. According to FASB, "The Board is issuing the amendments in this Update to enhance the transparency and decision usefulness of income tax disclosures." All businesses subject to ASC 740, Accounting for Income Taxes, are subject to the new disclosure requirements.

The new ASU includes guidelines for two new disclosures: a rate reconciliation disclosure and another for income taxes paid. Specifically, public business entities are required to include a rate reconciliation disclosure that consists of a tabular reconciliation with percentages and currency amounts in eight specific categories. These categories include state and local income taxes, tax credits, and changes in valuation allowances. Entities other than public business entities must disclose the nature and effect of specific reconciling items but are not required to prepare a numerical reconciliation.

ASU 2023-09 is effective for public entities for periods beginning after Dec. 15, 2024. For other entities, the effective date begins for reporting periods after Dec. 15, 2025. Earlier implementation is permitted. Financial statement preparers and businesses must understand and incorporate the disclosures required by ASU 2023-09.

Listen as our panel of financial reporting experts explains the ASU 2023-09, Improvements to Income Tax Disclosures, and offers suggestions to facilitate the transition from prior guidance.