Guidance for Intra-Entity Transfers of Assets Amended
Providing relief for reporting the income tax consequences of an intra-entity transfer, the Financial Accounting Standards Board (“FASB”) just issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Per the Update, a company must disclose in its financial reporting the income tax consequences of an intra-entity transfer of an asset when the transfer occurs. This is a change from existing GAAP, which does not allow the recognition of current and deferred income taxes for such transfers until the asset is sold to an outside party. The standard does not introduce new disclosure. Read More.
Recap of FASB’s June 15 Meeting
At its Board meeting on June 15, the Financial Accounting Standards Board (“FASB”) reached tentative decisions on the following topics: Accounting for income taxes—intra-entity asset transfers. The FASB will require entities to disclose the income tax consequences of an intra-entity asset transfer, excluding an intra-entity asset transfer of inventory, when the transfer takes place. Current GAAP will also be retained for intra-entity asset transfers of inventory, which requires the disclosure of income tax consequences when an outside party purchases the inventory. Public entities will have to apply the amendments during annual periods, and interim periods within, starting after December 15,. Read More.