FASB proposes new and revised income tax disclosures

The change would build on the board's disclosure framework.

A new FASB proposal would change existing disclosure requirements for income taxes and require new disclosures on organizations' financial statements.

The change would require organizations to:

  • Describe an enacted change in tax law.
  • Disaggregate certain income tax information between foreign and domestic.
  • Explain the circumstances that caused a change in assertion about the indefinite reinvestment of undistributed foreign earnings.
  • Disclose the aggregate of cash, cash equivalents, and marketable securities held by foreign subsidiaries.

Additional disclosures also would be required, with variations for public business entities and other organizations. The proposal is titled Proposed Accounting Standards Update, Income Taxes (Topic 740): Disclosure Framework—Changes to the Disclosure Requirements for Income Taxes.

The proposal is part of FASB's broader disclosure framework project, which is designed to improve the effectiveness of disclosures in notes to financial statements by clearly communicating the information that is more important to users.

FASB also is evaluating possible changes to existing disclosure requirements for fair value, inventory, and an employer's disclosure of defined benefit plans.

Comments were to be accepted until Sept. 30 at FASB's website.


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