The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) 2015-17, Income Taxes (Topic 740). The Update improves on the classification of deferred taxes on the balance sheet by eliminating the current requirement. The current requirement presents deferred tax liabilities and assets as current and noncurrent in a classified balance sheet or statement of financial position. Under the Update, organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. The amendments apply to all organizations that present a classified balance sheet.
This Update will align the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards (IFRS). IAS 1, Presentation of Financial Statements, requires deferred tax assets and liabilities to be classified as noncurrent in a classified statement of financial position.
For public companies, these amendments are effective for annual periods beginning after Dec. 15, 2016, and interim periods within those annual periods. This Update will be eligible for testing on the CPA Exam in January 2017, which is the later of (1) the first testing window beginning after the pronouncement’s earliest mandatory effective date (after Dec. 15, 2016) or (2) the first testing window beginning six (6) months after the pronouncement’s issuance date (July 2016).
It’s important to be aware of issuances that could impact how you answer the questions on the CPA Exam within that topic. Since exam material could conceivably change from one exam testing window to another, turn to Surgent for the latest updates. Our CPA Review team stays informed of all authoritative and pronouncement changes and ensures you’ll receive the news as soon as we do!
