FASB proposes simplifying accounting for income taxes
Rules for accounting for income taxes would be simplified under a proposal issued by FASB that is designed to reduce cost and complexity.
The proposed Accounting Standards Update would remove specific exceptions to the general principles in FASB ASC Topic 740, Income Taxes, under GAAP.
Under the proposal, an organization would no longer need to analyze whether the following apply in a given period:
The proposal also is designed to improve financial statement preparers’ application of income tax–related guidance and simplify GAAP for:
The proposal would not create new accounting requirements that are not previously included in Topic 740. Comments on the proposal were sought by June 28. The specific areas of potential simplification in the proposal were submitted by stakeholders who were seeking improvement.
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