FASB addresses stranded income effects of tax law
 

FASB addresses stranded income effects of tax law

FASB recently issued an Accounting Standards Update (ASU) that is designed to help organizations address certain stranded income tax effects in accumulated other comprehensive income resulting from P.L. 115-97, known as the Tax Cuts and Jobs Act.

Under the new FASB rules, financial statement preparers are provided an option to reclassify stranded tax effects within accumulated other comprehensive income in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded.

The amendments apply to any organization that is required to apply the provisions of FASB Accounting Standards Codification Topic 220, Income Statement — Reporting Comprehensive Income, for fiscal years beginning after Dec. 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Read more on the Journal of Accountancy.