Recently Issued Accounting Standards
In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) 2024-01, “
Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and
Similar Awards,
” which clarifies how to determine whether a profit interest and
similar awards should be accounted
for as a share-based payment arrangement under Topic 718 or within the scope of other guidance.
The ASU
provides an illustrative example with multiple fact patterns and amends
the structure of paragraph 718-10-15-3 of
Topic 718 to improve its clarity and operability.
The guidance in ASU 2024-01 applies to all entities that
issue
profits interest awards as compensation to employees or nonemployees
in exchange for goods or services.
Entities
can apply the amendments either retrospectively to all periods presented
in the financial statements or prospectively
to profits interest awards granted or modified on or after the date
of adoption.
If prospective application is elected,
an entity must disclose the nature of and reason for the change in accounting principle
that resulted from the
adoption of the ASU.
This ASU is effective for fiscal years beginning after December 15, 2024,
including interim
periods within those fiscal years.
We do not expect that the requirements of ASU 2024 – 01 will have a material
impact on our consolidated financial statements.
In December 2023, FASB issued ASU 2023-09, “
Income Taxes (Topic
740): Improvements to Income Tax
Disclosures
,” which requires public business entities to disclose additional
information in specified categories with
respect to the reconciliation of the effective tax rate to the statutory rate for federal, state and
foreign income taxes.
It also requires greater detail about individual reconciling items in
the rate reconciliation to the extent the impact of
those items exceeds a specified threshold.
In addition to new disclosures associated with the rate reconciliation,
the
ASU requires information pertaining to taxes paid (net of refunds received)
to be disaggregated for federal, state
and foreign taxes and further disaggregated for specific jurisdictions
to the extent the related amounts exceed a
quantitative threshold.
The ASU also describes items that need to be disaggregated
based on their nature, which is
determined by reference to the item’s fundamental or essential characteristics, such as the transaction or event
that
triggered the establishment of the reconciling item and the activity with which
the reconciling item is associated.
The ASU eliminates the historic requirement that entities disclose information
concerning unrecognized tax
benefits having a reasonable possibility of significantly increasing
or decreasing in the 12 months following the
reporting date.
This ASU is effective for annual periods beginning after December 15, 2024.
Early adoption is
permitted for annual financial statements that have not yet been
issued or made available for issuance.
This ASU
should be applied on a prospective basis; however, retrospective application is permitted.
We are currently
evaluating the impact that ASU 2023-09 will have on our consolidated
financial statements.
In November 2023, the FASB issued ASU 2023-07, “
Segment Reporting (Topic 280): Improvements to Reportable
Segments
,” which aims to improve financial reporting by requiring disclosure
of incremental segment information
on an annual and interim basis for all public entities to enable investors to
develop more decision-useful financial
analyses.
Currently, Topic
280 requires that a public entity disclose certain information about its
reportable
segments.
For example, a public entity is required to report a measure of
segment profit or loss that the chief
operating decision maker uses to assess segment performance and
make decisions about allocating resources.
Topic 280 also requires other specified segment items and amounts, such as depreciation, amortization and
depletion expense, to be disclosed under certain circumstances.
The amendments in this ASU do not change or
remove those disclosure requirements and do not change how a public
entity identifies its operating segments,
aggregates those operating segments or applies the quantitative thresholds
to determine its reportable segments.
This ASU is effective for fiscal years beginning after December 15, 2023, and interim
periods within fiscal years