The Board affirmed its decision to require that public business entities disclose rate reconciliation information using both percentages and reporting currency amounts.

The Board also decided to:

1. Retain the discussion of materiality in the basis for conclusions (paragraph BC15 of the proposed Update).
2. Clarify in the amendments to the Codification that all reconciling items must be presented on a gross basis unless specific guidance permits net presentation.
3. Include in the amendments to the Codification the description of the nature of the cross-border tax laws category (discussed in paragraph BC18 of the proposed Update) and allow entities to disclose, on a net basis, certain cross-border tax laws effects (for example, global intangible low tax income [GILTI]) and their related foreign tax credits.
4. Clarify in the amendments to the Codification the intent of the category of enactment of new tax laws.
5. Clarify in the amendments to the Codification the intent of the category of changes in unrecognized tax benefits and permit entities to aggregate disclosure of changes in unrecognized tax benefits for all jurisdictions.
6. Align the disclosure requirements on the income tax rate that could be used for the rate reconciliation with U.S. Securities and Exchange Commission (SEC) guidance in Regulation S-X Rule 4-08(h)(2), General Notes to Financial Statements—Income Tax Expense, which allows a foreign entity to use a statutory income tax rate other than the income tax rate in its country of domicile and requires disclosure of the rate used and the basis for using such a rate when the rate used by an entity is other than the U.S. federal corporate income tax rate.

The Board affirmed its decision to require that public business entities provide a qualitative description of the state and local jurisdictions that contribute to the majority of the effect of the state and local income tax category, with clarification that “the majority of the effect” means a simple majority (greater than 50 percent) of the effect of the state and local jurisdiction income tax category.

The Board affirmed its decision to require that public business entities provide an explanation of individual reconciling items, with revisions to replace the proposed example of significant year-over-year changes with other examples to illustrate the expected explanatory information.

The Board affirmed its decision to not provide incremental guidance for entities operating at or near break even and entities domiciled in a jurisdiction with no or minimal statutory tax rates but with significant operations in other jurisdictions with higher statutory tax rates (other than the alignment of the disclosure requirement on the income tax rate with the SEC guidance discussed above).

The Board affirmed its decision to require that public business entities disclose the tabular rate reconciliation on an annual basis.

The Board decided not to add a separate proposed disclosure (in paragraph 740-270-50-2 of the proposed Update) requiring a qualitative description, on an interim basis, of any reconciling items that result in significant changes in the estimated annual effective tax rate from the effective tax rate of the prior annual reporting period.

The Board affirmed its decision to require that an entity other than a public business entity qualitatively disclose the nature and effect of specific categories of reconciling items and individual jurisdictions that result in a significant difference between the statutory tax rate and the effective tax rate; a numerical reconciliation is not required.

Income Taxes Paid

The Board affirmed its decision to require that all entities disclose the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign.

The Board affirmed its decision to require that all entities disclose the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received).

The Board decided to require that all entities disclose income taxes paid disaggregated by federal (national), state, and foreign and by individual jurisdiction on an annual basis.

Certain Disclosures Previously Exposed for Comment

The Board affirmed its decision to replace the term public entity with the term public business entity.

The Board affirmed its decision to eliminate the requirement for all entities to (1) disclose the nature and estimate of the range of reasonably possible change in the unrecognized tax benefits balance in the next 12 months or (2) make a statement that an estimate of the range cannot be made.

The Board affirmed its decision to remove the requirement to disclose the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures.

The Board affirmed its decision to require that all entities disclose the following information:

1. Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign.
2. Income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign.