ThinkTWENTY20

Norwalk, CT, May 14, 2019—The Financial Accounting Standards Board (FASB) today issued a proposed Accounting Standards Update (ASU) intended to reduce cost and complexity for the accounting for income taxes. Stakeholders are asked to comment on the proposal by June 28, 2019.

The proposal would remove specific exceptions to the general principles in Topic 740—Income Taxes in Generally Accepted Accounting Principles (GAAP). The proposed ASU eliminates the need for an organization to analyze whether the following apply in a given period:

• Exception to the incremental approach for intraperiod tax allocation
• Exceptions to accounting for basis differences when there are ownership changes in foreign investments, and
• Exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. 

The proposed ASU also would improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for: 

• Franchise taxes that are partially based on income
• Transactions with a government that result in a step up in the tax basis of goodwill
• Separate financial statements of legal entities that are not subject to tax, and
• Enacted changes in tax laws in interim periods. 

The proposed ASU would not create new accounting requirements not previously included in Topic 740. The proposal is a part of the FASB’s Simplification Initiative to make narrow-scope simplifications and improvements to accounting standards through a series of short-term projects. The proposed ASU is available at www.fasb.org.

Gundi Jeffrey (Ms)

Business Journalist
Apdo. 73
Tlaxcala, Tlaxcala
90000 MEXICO

gundi_jeffrey@yahoo.com