FASB Simplifies the Presentation of Deferred Tax Liabilities and Assets
AAFCPAs would like to make you aware that on Nov. 20, 2015 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. This ASU applies to all organizations that present a classified balance sheet, and requires that all deferred tax liabilities and assets be classified as non-current. This is a significant change for entities which have deferred income taxes and that presently must separate the timing differences between current and noncurrent on the balance sheet, including the related footnotes. This accounting standards change may impact certain balance sheet metrics, such as working capital or current ratio.
For public business entities, the amendments in ASU 2015-17 are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments in ASU 2015-17 are effective for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early application is permitted for financial statements that have not yet been made available for issuance. Click here to review the full ASU from the FASB.
This ASU simplifies presentation and disclosure requirements significantly, and AAFCPAs encourages clients to consider early adoption.
If you have any question about how this ASU will impact you directly, please contact your AAFCPA partner, or Jeffrey Mead, CPA, CGMA at 774.512.4131, firstname.lastname@example.org.