Accounting rulemakers have their work cut out for them trying to determine how to meet investors’ needs for information about corporate tax risks without breaking preparers’ backs.
The Financial Accounting Standards Board is sifting through dozens of comment letters providing feedback to a proposed update to accounting standards as part of its comprehensive effort to improve disclosures. In this particular proposal, the board is looking to increase disclosures under Accounting Standards Codification Topic 740 that would give a sense of how an entity’s tax obligations are spread across federal, state, and foreign jurisdictions. Companies would also have to explain how they have used valuation allowances related to tax positions at federal, state, and global levels.
