October 7, 2015: The Financial Accounting Standards Board (FASB) plans to release in the first quarter of 2016 a proposal to require businesses to provide expanded information in their financial statement footnotes about the tax implications of their foreign earnings and more details about domestic taxes.
The proposal is expected to include requirements that multinational companies provide a breakdown of income taxes associated with foreign earnings versus domestic income and a further breakdown of significant foreign earnings by jurisdiction, said FASB assistant project manager Jamie Dordik at a September 29th meeting of the accounting board’s Financial Accounting Standards Advisory Council (FASAC).
In addition to a breakdown of taxes by country, the FASB wants more details about tax expense. A company’s current tax expense line is made up of several items, including taxes recognized, deferred tax liabilities, and taxes on foreign earnings that were earned and remitted in the reporting period.
Dordik gave the update on the project during a session devoted to income taxes and investor frustrations with current accounting.