FASB Income Tax Disclosure Requirements: 5 Ways Bloomberg Tax Provision Helps You Comply With Confidence
In 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The purpose of the ASU is to enhance the transparency and usefulness of income tax disclosures, primarily focused on two main areas: rate reconciliation and income taxes paid.
This update requires companies to change how they calculate and report their income tax provision under ASC 740. As the new provision reporting and disclosure requirements for public companies start to go into effect in 2025, now is a good time to ensure you have all the right puzzle pieces on the table to provide the rate reconciliation and disaggregated income taxes paid disclosures.
[Watch our on-demand webinar Preparing for Accounting Changes From FASB and TCJA to learn how to incorporate automation into your tax workflow to easily respond to changes that impact your ASC 740 process.]
Bloomberg Tax leads the tax industry with advancements in innovation. Our provision software solution already collects and manages the details needed for the new FASB disclosure breakout requirements – and we’ll continue to innovate to make reporting even simpler.
Here’s how Bloomberg Tax Provision ensures you’re fully equipped to handle the new FASB requirements:
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Automatically present the rate reconciliation in both dollars and percentages
If you’re doing these rate reconciliations in spreadsheets, there will be a lot of work involved in breaking out the details needed, updating formulas, recalculating existing or older provisions for the retrospective presentation, and determining which jurisdictions are greater than or equal to 5%. The cumbersome part of tax provision will be making spreadsheets handle layers of calculations they weren’t designed to do.
On the other hand, Bloomberg Tax Provision can make your chances of a seamless transition much higher – with no manual work required. With the mechanics and information in place, our provision software solution can deliver the information you need to prepare the required disclosures.
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Effortlessly disaggregate rate reconciliation data
The eight disaggregated rate rec categories are already reflected in the rate rec data. For example:
- Inputs for tax credits, valuation allowances, and nontaxable items are presented separately so users can easily see the amounts related to federal versus foreign returns.
- The provision impact of foreign tax returns, state and local taxes, and uncertain tax benefits are tracked and calculated at a granular level.
- Changes to the rate reconciliation are automatically calculated and applied.
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Accurately calculate your state-by-state current tax expense
Track state-specific modifications, generated or utilized net operating losses (NOLs) and credit carryforwards, and income tax payments all within a single screen.
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Easily generate dynamic, versatile reports
Reports are Excel-based and audit-ready, including formulas and grouping functionality.
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Quickly compare new and old rate rec requirements
Quickly analyze side-by-side provisions to compare the previous rate rec requirements and the new rate rec requirements – regardless of whether you’re disclosing the enhanced rate rec retrospectively.
Simplify your provision calculation and reporting process with Bloomberg Tax Provision
Download our Guide to FASB Changes to ASC 740 for more insights on how the changes introduced by FASB ASU 2023-09 will impact how you calculate income tax provisions and prepare disclosures.
Getting started today with preparing your provision process is the best way to not get overwhelmed by these upcoming changes to FASB income tax provision disclosure requirements. Our ASC 740 experts can get you up and running with Bloomberg Tax Provision in as few as four weeks, so you’ll be prepared when the FASB ASU to goes into effect.
See Bloomberg Tax Provision in action
Take a quick tour to see how Bloomberg Tax Provision can help you automate complex calculations, leverage integrated tax laws, and deliver audit-ready reports.
Request a demo to learn how to save time and ensure accuracy with Bloomberg Tax’s powerful tax provision software.