As previously communicated, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 in December 2023 that will require enhanced disclosures about a reporting entity’s effective tax rate and its income taxes paid (refunded). ASU 2023-09 is effective for public business entities (PBEs) for annual periods beginning after December 15, 2024 (or January 1, 2025 for PBEs with calendar year ends) and for annual periods beginning after December 15, 2025, for all other entities.
Our article, ASC 740: FASB releases ASU 2023-09: Improvements to Income Tax Disclosures, walks through the application of the new effective tax rate reconciliation, the enhanced income taxes paid (refunded) disclosures and how these requirements may differ from current guidance.
Entities should begin reviewing their accounting, tax and reporting processes to determine whether changes will be needed to comply with the new requirements.
