FASB issued guidance Wednesday that supersedes FASB ASC Topic 995, U.S. Steamship Entities, because its rules have become irrelevant.
Steamship entities that had statutory reserve deposits made before Dec. 15, 1992, had an option provided in FASB Statement No. 109, Accounting for Income Taxes. The Department of Transportation program that originated these reserve deposits and the IRS provide a 25-year time frame for using the reserves or forfeiting the tax deferral.
FASB decided that all steamship entities with statutory reserve funds should be reporting all deferred taxes in accordance with Topic 740, Income Taxes. In addition, FASB decided that the guidance in Topic 995 on making the transition to the requirements of Topic 740 is no longer relevant because statutory funds deposited on or before Dec. 15, 1992, have reached the 25-year limit.
—Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is a JofA editorial director.