FASB to Review Backwards Tracing Related to Tax Reform
The Financial Accounting Standards Board’s (“FASB”) research team plans to review how the tax code changes stemming from the Tax Cuts and Jobs Act (“TCJA”) will impact backwards tracing, which is a practice U.S. GAAP currently prohibits. Backwards tracing is a practice in which the impact of a change in a deferred tax credit or charge is included in the same line item wherein the deferred taxes were initially recorded. According to FASB staff member Jason Bond, the board wants to review the costs of backwards tracing and consider alternatives to determine whether the benefits outweigh the costs. Bond remarked. Read More.
FASB Finalizes Standard Related to Tax Reform
The Financial Accounting Standards Board (“FASB”) has issued an Accounting Standards Update (“ASU”) concerning certain stranded income tax effects in accumulated other comprehensive income caused by the Tax Cuts and Jobs Act. ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, gives financial statement preparers the option to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings in every period wherein the impact of the new corporate income tax rate in the new tax law (or portion thereof) is recognized. As a result of the new guidance,. Read More.
Topics: Accounting Standards Update "ASU", Accumulated Other Comprehensive Income, Comprehensive Income (Topic 220), FASB, Financial Accounting Standards Board "FASB", Stranded Income Tax Effects, Tax Cuts and Jobs Act, Tax Reform
Project to Improve Structure of FASB’s Codification Underway
A Financial Accounting Standards Board (“FASB”) group is undertaking a project to make improvements to the board’s Accounting Standards Codification. Led by the FASB’s Technical Corrections and Improvements project team, the project will focus on reorganizing the structure of the Codification’s content. All guidance in the Codification will remain untouched. Most changes will impact the industry Topics. Some Topics will be simplified to reflect superseded guidance, which often caused parts of remaining guidance left among lengthy passages of outdated guidance. The overlapping Topic structure from several industry Topics will also be eliminated, creating a more user-friendly structure. The planned changes will. Read More.