Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), is effective for public business entities generally beginning in calendar year 2025 and other entities one year later. ASU 2023-09 is intended to help investors better assess how an entity’s operations and related income tax risks affect the entity’s income tax rate and prospects for future cash flows. To achieve these objectives, the ASU requires expanded disclosures in the notes to the financial statements, including the use of consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid information disaggregated by jurisdiction.
This Accounting Brief identifies certain key planning considerations as entities prepare to comply with the new disclosure requirements.
