FASB recently issued an Accounting Standards Update (ASU) that is designed to help organizations address certain stranded income tax effects in accumulated other comprehensive income resulting from P.L. 115-97, known as the Tax Cuts and Jobs Act.
Under the new FASB rules, financial statement preparers are provided an option to reclassify stranded tax effects within accumulated other comprehensive income in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded.
The amendments apply to any organization that is required to apply the provisions of FASB Accounting Standards Codification Topic 220, Income Statement — Reporting Comprehensive Income, for fiscal years beginning after Dec. 15, 2018, and interim periods within those fiscal years. Early adoption is permitted.
FASB also made the following recent issuances:
- An ASU that clarifies the application of the board's new lease accounting standard to land easements and makes adopting the leases standard easier for some land easements.
- A proposed ASU that would clarify the accounting for implementation costs related to a cloud-computing arrangement that is a service contract.
- Technical corrections and improvements to its financial instruments standard on recognition and measurement of financial assets and liabilities that was originally issued in 2016.
- A proposal that would expand the list of U.S. benchmark interest rates permitted in the application of hedge accounting.