The Financial Accounting Standards Board (FASB) has decided to explore the option of simplifying the standards in relation to deferred tax assets and liabilities from a reporting and classification standpoint. After many sleepless months, the FASB has proposed two accounting standard updates.
The Financial Accounting Standards Board and the International Accounting Standards Board are developing a converged standard regarding revenue recognition that is expected to have an effect on all entities that adhere to US GAAP or IFRS. The standard is expected to be released in the first quarter of 2014.
Earlier this year the Financial Accounting Standards Board (FASB), responsible for U.S. Generally Accepted Accounting Principles (US GAAP), and the International Accounting Standards Board (IASB), responsible for International Financial Reporting Standards (IFRS), issued jointly a converged standard on the recognition of revenue from contracts with customers that will supersede virtually all revenue recognition guidance currently in US GAAP and IFRS. The new standard was issued to address a number of concerns regarding the complexity and lack of consistency surrounding the accounting for revenue transactions.
In November 2015, the FASB issued Accounting Standards Update (ASU) 2015-17, Income Taxes (Topic740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes. Under current GAAP when a classified balance sheet is presented, deferred tax liabilities and assets are separated into a current amount and a noncurrent amount generally on the basis of the classification of the related asset or liability for financial reporting. The Board determined that the current presentation under GAAP does not provide users of financial statements with useful information as the classification between current and noncurrent generally does not reflect when a temporary difference will reverse and become a taxable or deductible item.
IFRS Survival Guide
Addressing the Challenges of New Standards