The Financial Accounting Standards Board published a proposed accounting standards update Tuesday to clarify and get rid of some specific inconsistencies in key parts of GAAP.
The proposals cover several areas of the FASB Accounting Standards Codification and apply to a variety of organizations, including public companies, private companies and nonprofits.
Some of the main proposals include:
• An amendment to Subtopic 718-740, Compensation—Stock Compensation—Income Taxes, clarifies that an entity should recognize excess tax benefits (or tax deficiencies) in the period when the tax deduction for compensation expense is claimed on the organization’s tax return. The amendment includes deductions taken on the tax return in a different period from when the event that led to the tax deduction happened and the uncertainty about whether the entity will receive a tax deduction and the amount.
• An amendment to Subtopic 805-740, Business Combinations—Income Taxes, removes a list of three methods for allocating a consolidated tax provision to an acquired entity after an acquisition.
• An amendment to Subtopic 820-10, Fair Value Measurement—Overall, clarifies FASB’s decisions about the fair value measurement of a liability or instrument from the perspective of a market participant holding an item identical to an asset at the measurement date.
FASB is asking for feedback on the proposals by Dec. 4, 2017.
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