In December 2023, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU 2023-09) to address investors, creditors and other stakeholder requests for enhanced income tax disclosures.
ASU 2023-09 is intended to provide more transparent, decision-useful information about an entity’s income taxes by requiring enhanced disclosures primarily related to the existing rate reconciliation and income taxes paid information. More specifically, ASU 2023-09 requires the use of consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid information disaggregated by jurisdiction. It also includes certain other amendments to improve the usefulness of income tax disclosures.
For public business entities, the amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. For other entities, the amendments are effective for annual periods beginning after December 15, 2025.
In November 2024, we issued an Accounting Brief that identifies key planning considerations as entities prepare to comply with the new disclosure requirements. Our recently published Financial Reporting Insights provides a comprehensive discussion of ASU 2023-09, including implementation and interpretive guidance to assist with the adoption of the new standard.
