FASB supersedes outdated guidance related to Circular 202

By Ken Tysiac

FASB issued amendments to accounting rules Monday to supersede outdated guidance related to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges.

Circular 202 has been rescinded and is no longer relevant. FASB issued Accounting Standards Update No. 2018-06, Codification Improvements to Topic 942, Financial Services — Depository and Lending, to supersede the guidance within FASB ASC Subtopic 942-740, Financial Services — Depository and Lending — Income Taxes, that has been rescinded by the Office of the Comptroller of the Currency.

The amendments in the update take effect immediately, and the update is not expected to have a significant effect on current accounting practices.

FASB is adding a cross-reference between Subtopic 740-30, Income Taxes — Other Considerations or Special Areas, and Subtopic 942-740 to improve the usefulness of the codification.

The cross-reference to Subtopic 740-30 will refer readers to Subtopic 942-740 for guidance on the tax consequences of bad debt reserves of savings and loans (and other qualified thrift lenders) that arose in tax years beginning before Dec. 31, 1987.

Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is a JofA editorial director.

SPONSORED REPORT

Tax reform complicates year-end tax planning

Get your clients ready for tax season with these year-end tax planning strategies, which address how to make the most of recent tax law changes, such as the new deduction for qualified business income and the cap on the deductibility of state and local taxes.

VIDEO

What RPA is and how it works

Robotic process automation is like an Excel macro that can work on multiple applications, says Danielle Supkis Cheek, CPA. RPA can complete routine, repetitive tasks such as data entry, freeing up employee time from lower-level chores.