Explore how Bloomberg Tax Provision’s new rate rec automatically adapts to ASU 2023-09 to simplify reporting compliance.
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 the right income tax rate reconciliation solution to provide the necessary disclosures.
Bloomberg Tax leads the tax industry with advancements in innovation. Our ASC 740 provision software 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.
[Download our easy-to-understand Explainer: FASB’s New Income Tax Disclosure Requirements (ASU 2023-09) to get ahead of the changes and comply with confidence.]
How to comply with FASB income tax disclosure requirements
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
ASU 2023-09 will require companies to change how they calculate and report their income tax provision. Understanding these changes is essential for corporate tax professionals handling disclosure requirements. Download our Explainer: FASB’s New Income Tax Disclosure Requirements (ASU 2023-09) for expert analysis to help you stay ahead of the latest FASB guidance.
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.