During its Agenda Prioritisation meeting on 13 August, 2014, the Financial Accounting Standards Board (FASB) added the following two income tax accounting topics to its agenda as part of its broader simplification initiative:
- Possible elimination of the exception for recognising deferred taxes on certain intercompany transactions under ASC 740-10-25-3(e); and
- Possible classification of all deferred tax assets and liabilities as non-current.
The FASB also asked the staff for additional research on potentially eliminating the intra-period tax allocation rules by having income tax expenses reported as a single line item.
FASB’s willingness and ongoing efforts to deal with the above-mentioned very complex items show that significant near-term improvements may be expected.