The Financial Accounting Standards Board (FASB) just issued ASU 2015-17, which will be effective for years beginning after December 15, 2016, for public entities and for years beginning after December 15, 2017 for nonpublic entities.
According to the FASB Website, “The Board is issuing this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements.”
ASU 2015-17 requires that all deferred tax assets and liabilities be reported as noncurrent, eliminating the need to analyze temporary differences to determine if deferred tax assets should be reported as current or noncurrent. This pronouncement was issued as part of the FASB’s project focused on making financial reporting less costly without reducing the quality of the information provided.
Since ASU 2015 – 17 becomes effective as of December 15, 2016 and based on the AICPA’s CPA Exam Policy on New Pronouncements, it will be testable on the CPA Exam starting Q3 2017.
For more detailed information and to review the Update in its entirety, please visit FASB online.