Revised Income Tax Disclosure Project Won’t Be Controversial
FASB revised the objective of its income tax disclosure project to focus on targeted improvements, deciding to steer clear of aspects of the topic that could be controversial. Under the revised project objective, the board will improve disclosures on income taxes paid and the effectiveness of the rate reconciliation table, according to the discussions. “It would be very helpful to have more information about the estimates that entities are making; I think today the tool to provide that information is the reconciliation table,” FASB member Marsha Hunt said. “A company that may not be paying U.S. taxes, if it’s just one big lump—foreign difference—that’s not very helpful,” she said. “So I think that we could probably make some progress toward sharing more information about what the reporting entity is doing in its estimation process, and I still think the most effective tool is the reconciliation that people are used to today.” In general, board members wanted the project to be achievable, pointing to some of the complexity that could result in trying to take on too many other issues.
Accounting Standards Taxonomy Published
The 2022 Taxonomy for International Financial Reporting Standards (IFRS) has been published, the IFRS Foundation announced on March 24.The taxonomy enables electronic reporting of financial and disclosure information prepared by IFRS filers. This year’s taxonomy includes changes to the 2021 taxonomy resulting from:
- Disclosure of Accounting Policies, which amended International Accounting Standard (IAS) 1, Presentation of Financial Statements and IFRS Practice Statement 2, Making Materiality Judgements, issued by the IASB in February 2021;
- Definition of Accounting Estimates, which amended IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, issued by the IASB in February 2021;
- Initial Application of IFRS 17 and IFRS 9—Comparative Information, which amended IFRS 17, Insurance Contracts, issued by the IASB in December 2021.
The 2022 taxonomy also includes changes to its technology to reflect developments in standards and practices, according to the announcement. The changes also reflect developments in the usage of the taxonomy or comparable taxonomies in various regulatory environments.
Proposal on Climate-Related Disclosure Rules Coming Soon
The new International Sustainability Standards Board (ISSB) is expected to issue a proposal on March 31to solicit public comment on climate-related disclosure rules, according to a March 24, 2022, alert from the IFRS Foundation, its trustee board. The ISSB will issue proposed Climate and General Sustainability-related Disclosure requirements that, once finalized, will form the global baseline for climate-related disclosures. “The global baseline concept has been welcomed by the G20 Leaders, the International Organization of Securities Commissions (IOSCO) and others,” the alert states. The climate proposal will be issued about three months after three ISSB members were appointed: Chair Emmanuel Faber, Vice Chair Sue Lloyd, and Special Advisor to the Chair Janine Guillot. The goal is to issue the proposal to solicit public comment and vet those comments and the proposal once the full board has been seated, according to a prior trustee announcement. The ISSB is expected to seat up to 14 members, with more than half expected to be seated in coming months. The full board will not be seated until the third quarter of 2022. The proposal was briefly mentioned in a broader announcement of a Memorandum of Understanding (MoU) that was signed by foundation trustees and the Global Reporting Initiative (GRI), parent entities of the ISSB and the Global Sustainability Standards Board (GSSB), to coordinate their work programs and standards-setting activities.