The Financial Accounting Standards Board (FASB) on July 26
proposed improvements to disclosures about income taxes in its
ongoing project of establishing an overarching framework intended
to make financial statement disclosures more effective and
coordinated. The FASB Proposed Account Standards Update would
modify existing disclosure requirements and provide additional
disclosure requirements for income taxes. Among other things, the
proposed modifications and additions would require multinational
companies to:
- Disclose the aggregate of cash, cash equivalents and marketable securities held by foreign subsidiaries
- Describe enacted changes in tax law that are likely to have an effect in a future period
- Provide an explanation of circumstances that caused a change in assertion about the indefinite reinvestment of undistributed foreign earnings
- Disaggregate certain income tax disclosures between domestic and foreign including the amount of income taxes paid to any country that is significant to total income taxes paid.
Multinational companies should evaluate how these proposals will
affect their financial statements and evaluate their preparedness
if the proposal become required.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
