FASB Eliminates U.S. Steamship Entities Codification Topic

The US Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) No. 2017-15, Codification Improvements to Topic 995, U.S. Steamship Entities: Elimination of Topic 995. This ASU eliminates Topic 995, U.S. Steamship Entities, from the FASB Codification.

These amendments affect all entities that have unrecognised deferred taxes related to statutory reserve deposits that were made on or before 15 December 1992.

History

The FASB issued ASU 2017-15 to supersede Topic 995, U.S. Steamship Entities, because its guidance is no longer relevant. FASB Statement No. 109, Accounting for Income Taxes, the predecessor to Topic 740, Income Taxes, provided an option in reporting deferred taxes for steamship entities that had statutory reserve deposits that were made before 15 December 1992. The US Department of Transportation and the Internal Revenue Service provided a 25-year time frame for entities to use the reserves or forfeit the tax deferral.

The FASB decided that all steamship entities with statutory reserve funds now should be reporting all deferred taxes in accordance with Topic 740. The guidance on transitioning to Topic 740 is no longer relevant because statutory funds deposited on or before 15 December 1992 have reached the 25-year limit.

Effective Date and Transition

The amendments are effective for fiscal years and first interim periods beginning after 15 December 2018. Early adoption is permitted for all entities, including adoption in an interim period.

An entity should apply the amendments on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. Entities also should disclose the amounts and types of temporary differences for which a deferred tax liability had not previously been recognised.

ASU 2017-15 can be found on this link: http://www.fasb.org/cs/ContentServer?c=Document_C&pagename=FASB%2FDocument_C%2FDocumentPage&cid=1176169496082

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