FASB to Propose Removal of Outdated Guidance
Amendments to the disclosure requirements for deferred taxes will be proposed by the Financial Accounting Standards Board (“FASB”). Announced on May 3, the planned changes are part of the FASB’s technical corrections project to remove outdated or flawed accounting requirements from U.S. GAAP. The proposed changes are limited in scope since the guidance is out-of-date and few companies will be impacted.
One proposal could include eliminating from the FASB’s Accounting Standards Codification rules that impact privately held fishing vessel owners. The deferred tax credit reporting rule under ASC 995-740-50-2, U.S. Steamship Entities — Income Taxes — Disclosure, originally established for steamship businesses has recently been offered to fishing vessel owners. About 157 owners of commercial fishing vessels benefit from the credits. The proposal is likely to remove the rule defer to the disclosure guidance under Topic 740, Income Taxes.
Another proposed change is eliminating some recognition and disclosure guidance under Subtopic 942-740, Financial Services —Depository and Lending — Income Taxes. In particular, the guidance that would be phased out relates to the bad debt reserve method which Congress repealed through the Small Business Job Protection Act of 1996. The FASB also proposes cutting the guidance for computing deferred tax charges under ASC 942-740-45-1, Financial Services —Depository and Lending — Income Taxes — Other Presentation Matters, since the banking company who originally issued the rule has since repealed it.
The proposed amendments will likely be issued simultaneously and have a 60-day comment period.