BDO Knows ASC 740: New Income Tax Disclosures (ASU 2023-09)
This publication includes practical guidance on the new disclosure requirements and our insights from early adopters.
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Summary
Accounting Standards Update (ASU) No. 2023-09, Improvements to Income Tax Disclosures, introduces new requirements clarifying and expanding specific income tax disclosures. The ASU significantly expands the rate reconciliation disclosure requirements. It also introduces requirements for all entities to disclose income taxes paid to individual jurisdictions exceeding a specified threshold and updates disclosures about unrecognized tax benefits and undistributed earnings of subsidiaries.
ASU 2023-09 also replaces the term “public entity” in Accounting Standards Codification Topic 740, Income Taxes, with the term “public business entity” (PBE) for consistency with other areas of U.S. GAAP.
Download our publication to learn more about the new requirements.
Effective dates
- For public business entities, the ASU is effective for fiscal years beginning after December 15, 2024.
- For entities other than PBEs, the guidance is effective for fiscal years beginning after December 15, 2025. Early adoption is allowed.