The Bottom Line: Prepare for Deeper Disclosure
FASB’s issuance of ASU 2023-09 is no mere technical update. It signals the Board is emphasizing increased disaggregation, jurisdictional clarity, and increased utility of income tax disclosures for investors to make more informed capital allocation decisions.
The takeaway? Companies should be proactive. Their legal and accounting teams should review tax risk disclosures now, not later. Companies should also re-examine the controls and processes around rate reconciliation and jurisdictional tax payments, given the coming requirements.
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