12 Days of SSAP: SSAP 101 and ASC 740 Income Tax Disclosures

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Hot Take:

Hot Take

As the holidays approach, JLK Rosenberger is taking a new perspective on a holiday classic – the Twelve Days of Christmas. Rather than filling your head with turtle doves and gold rings, we are focusing on the latest in the insurance industry and how it might impact your insurance company in 2020 and beyond.

This article covers information about the proposed updates to ASC 740

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On March 25, 2019, the Financial Accounting Standards Board (FASB) issued proposed updates to the income tax disclosure rules under ASC 740 in order to improve the effectiveness and relevance of disclosures for users of financial statements. The Proposed Accounting Standards Update – Income Taxes (Topic 740): Disclosure Framework – Changes to the Disclosure Requirements for Income Taxes (the proposed ASU) is applicable to all companies that are subject to income taxes. However, certain disclosure requirements within the proposed ASU are only required for public business entities.

FASB’s revised disclosure requirements would place a significant focus on the disaggregation of tax-relevant amounts such as pre-tax income, income taxes paid, income tax expense, deferred tax carryforwards between federal, state and foreign. Additionally, the proposed amendments would require more detailed disclosures for the effective tax rate reconciliation and unrecognized tax benefits. Insurance companies need to contemplate the impact of these proposed changes on their statutory statements.

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