FASB proposes technical corrections to income tax accounting for certain entities
IKPMG reports on the FASB’s latest proposed technical corrections. The proposed ASUs would eliminate outdated special income tax accounting guidance for steamship entities and certain depository and lending institutions.
Proposed ASU on ASC Topic 995
Proposed ASU on ASC Topic 942
- Steamship entities
- Savings and loan institutions
- June 27, 2017 – FASB issued proposed ASUs
- August 28, 2017 – Comments due on proposed ASUs
The FASB is proposing to eliminate:
- ASC 995, U.S. Steamship Entities, which only includes an exemption to the recognition of deferred taxes on certain statutory reserve deposits that were, but are no longer, tax deferred
- Duplicative guidance requiring that savings and loans entities (and other thrift lenders) provide deferred taxes on bad debt reserves that arose after December 31, 1987 (ASC paragraph 942-740-25-2)
- Outdated guidance related to the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Taxes (ASC paragraph 942-740-45-1)
The proposals are part of an ongoing FASB project to make non-substantive technical corrections, clarifications and improvements that are not expected to have a significant effect on accounting practice or create a significant administrative cost for most entities.