Income tax disclosures
Hot Topic | November 2024
Latest edition: We address common questions regarding the application of recent disaggregation enhancements.
This Hot Topic provides insight into implementing ASU 2023-09 and identifying the many moving parts in disaggregating income tax disclosures. We have updated our guidance to include new observations based on questions we have encountered in practice.
Applicability
- All entities subject to the income tax disclosure requirements
Relevant dates
Effective date | Public entities | All other entities |
Annual periods – Fiscal years beginning after | Dec. 15, 2024 | Dec. 15, 2025 |
Early adoption is allowed for annual financial statements not yet issued or made available for issuance. | ||
Key impacts
We summarize the guidance in the ASU on a topic-by-topic basis and provide our observations related to implementing the guidance based on our current understanding of the ASU. Discussion and detailed examples are provided about disaggregating:
- the effective tax rate reconciliation
- income taxes paid
- pretax income (loss) and income tax expense (benefit), both from continuing operations.
We also answer many of the questions encountered in practice when implementing the ASU and continue to analyze how the ASU applies to issues arising in practice. This Hot Topic will be updated as additional information becomes available.
Report contents
- Rate reconciliation categories
- Income taxes paid
- Pretax income (loss) and income tax expense (benefit), both from continuing operations
- Change in scope of certain preexisting disclosure requirements
- Eliminated disclosures
- Effective date
- Transition
- Disclosures about standards not yet adopted (i.e. SAB 74)
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Income tax disclosures
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Resource
FASB issues ASU to disaggregate income tax disclosures
The ASU enhances income tax disclosures for the effective tax rate reconciliation and income taxes paid.
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Enhancing transparency: Disaggregating income tax disclosures
We discuss ASU 2023-09, including the disaggregated rate reconciliation, income taxes paid and frequently asked questions.
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Handbook: Accounting for income taxes
Latest edition: KPMG explains the accounting for income taxes in detail, providing examples and analysis.
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