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FASB proposes improvements to income tax disclosures

RFP
Tax Hot Topics: Income tax disclosure improvementsThe Financial Accounting Standards Board (FASB) on July 26 proposed improvements to disclosures about income taxes in its ongoing project of establishing an overarching framework intended to make financial statement disclosures more effective and coordinated. The FASB Proposed Account Standards Update would modify existing disclosure requirements and provide additional disclosure requirements for income taxes. Among other things, the proposed modifications and additions would require multinational companies to:
  • Disclose the aggregate of cash, cash equivalents and marketable securities held by foreign subsidiaries
  • Describe enacted changes in tax law that are likely to have an effect in a future period
  • Provide an explanation of circumstances that caused a change in assertion about the indefinite reinvestment of undistributed foreign earnings
  • Disaggregate certain income tax disclosures between domestic and foreign including the amount of income taxes paid to any country that is significant to total income taxes paid.
Multinational companies should evaluate how these proposals will affect their financial statements and evaluate their preparedness if the proposal become required.

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