Project Update

Disclosure Framework—Disclosure Review: Income Taxes

Last updated on August 31, 2015. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Updated sections are indicated with an asterisk *)

The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

*Project Objective and Overview
*Decisions Reached at Last Meeting
*Tentative Board Decisions Reached to Date
Next Steps
*Board/Other Public Meeting Dates
*Contact Information

*Project Objective and Overview

The objective and primary focus of the Disclosure Framework project is to improve the effectiveness of disclosures in the notes to financial statements by clearly communicating the information that is most important to users of each entity’s financial statements. Achieving the objective of improving effectiveness requires development of a framework that promotes consistent decisions about disclosure requirements by the Board and the appropriate exercise of discretion by reporting entities.

To achieve that objective, the Disclosure Framework project comprises two components: the Board’s Decision Process and the Entity’s Decision Process.

Currently, four disclosure areas are being evaluated as part of the Disclosure Framework project. Each review will include (1) evaluation of existing disclosure requirements within the Topic after applying the concepts in the Board’s decision process and (2) promotion of the appropriate use of discretion by entities specifically within the Topic.

This page provides updates on the disclosure review of Income Taxes (740-10-50). For information on the other three disclosure reviews, see the following:
  1. Defined Benefit Plans (715-20-50)
  2. Fair Value Measurement (820-10-50)
  3. Inventory (330-10-50)
Additionally, disclosure requirements for Interim Reporting are being evaluated for modifications.

The FASB staff has developed a “Q&A: FASB’s Disclosure Framework Project” fact sheet which can be viewed here.

*Decisions Reached at Last Meeting (August 26, 2015)

The Board discussed disclosures related to unrecognized tax benefits, making the following decisions:

The Board decided to enhance the existing requirement to disclose a tabular reconciliation of the unrecognized tax benefits at the beginning and end of the period by requiring disclosure of:
  1. Settlements using existing tax assets separate from those that are ultimately settled in cash
  2. A breakdown of the ending balance of the liability for unrecognized tax benefits by the line items in the balance sheet in which the liability is recognized.
The Board also decided that neither public nor private entities would be required to disclose the nature and an estimate of the range for a reasonably possible change in the unrecognized tax benefit balance in the next 12 months or a statement that an estimate of the range cannot be made.

*Tentative Board Decisions Reached to Date

Tentative Board Decisions Reached to Date

Next Steps

The Board will discuss potential changes to the Topic disclosures on the basis of the concepts and decision questions in the proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting Chapter 8—Notes to Financial Statements in a future decision-making meeting.

*Board/Other Public Meeting Dates

The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

*August 26, 2015 Board Meeting—Disclosure Review
February 11, 2015 Board Meeting—Disclosure Review
January 7, 2015 Board Meeting—Disclosure Review
April 4, 2014 Board Meeting—Field Study Results and Next Steps

*Contact Information

Nick Cappiello
Project Manager

Jaime Dordik
Assistant Project Manager

Kristin Floyd
Postgraduate Technical Assistant

Carter Meneley
Postgraduate Technical Assistant