Tax Management — ASU 2023-09 Compliance & ETR Reporting

ASU 2023-09 Compliance

What disclosures are required under ASU 2023-09? The standard requires tabular rate reconciliation across 8 prescribed categories, disaggregation of items exceeding 5% of statutory-rate amount, jurisdictional cash taxes paid breakdowns, and expanded qualitative context.

8 Categories of Rate Reconciliation

ASU 2023-09 requires rate reconciliation across 8 standardized categories: federal statutory rate, state and local taxes, foreign tax effects, tax credits, permanent differences, changes in valuation allowance, changes in unrecognized tax benefits, and other adjustments.

5% Threshold

Companies must separately disclose any reconciling item that exceeds 5% of the amount computed by multiplying pretax income by the applicable statutory rate. This threshold applies to both the percentage and dollar amount formats.