ASU 2015-17 (Balance Sheet Classification of Deferred Taxes) Testable January 1, 2017

On November 20, 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which simplifies balance sheet presentation of deferred taxes. As a result, there will be no difference between U.S. GAAP and IFRS in the presentation of deferred taxes. Under the current GAAP, deferred tax amounts are classified on the balance sheet as current or noncurrent based on the classification of the related asset or liability. If a deferred tax item is not related to an asset or liability for financial reporting, it is classified based on the expected reversal date of the temporary difference.

Under ASU 2015-17, deferred tax assets and liabilities are classified on the balance sheet as noncurrent amounts.

ASU 2015-17 is subject to the revised AICPA Pronouncement Policy and therefore will not be testable on the CPA exam until January 1, 2017. Thus, candidates will not see the new pronouncement reflected in Gleim material until our 2017 edition is released in December of 2016.