Q4 2025 Technical Accounting Updates: Implementing 2025 Standards and Preparing for 2026 and Beyond
Standards Effective for 2025 Annual Reporting
Public Companies
ASU 2023-07 — Enhanced Segment Reporting Disclosures
Effective: Fiscal years beginning after December 15, 2023
Who: Public entities with reportable segments
Disclose CODM-reviewed segment expenses and usage narratives.
Q4 Priorities: Document CODM expenses, leverage TAA tools for consistency, finalize disclosures, and review with auditors.ASU 2023-09 — Improved Income Tax Disclosures
Effective: Annual periods beginning after December 15, 2024
Who: Public entities subject to income taxes
Requires detailed rate reconciliations and taxes paid by jurisdiction.
Q4 Priorities: Compile data, draft disclosures, include SAB 74 compliance notes in Q4 10-Q/10-K, and ensure tax software readiness.ASU 2023-08 — Crypto Asset Accounting
Effective: Fiscal years beginning after December 15, 2024
Who: Entities holding crypto assets
Measure at fair value with net income recognition.
Q4 Priorities: Perform fair value calculations using TAA tools, prepare disclosures, and document controls.ASU 2024-01 — Profits Interests and Similar Awards
Effective: Annual periods beginning after December 15, 2024
Who: Entities issuing profits interests
Clarifies ASC 718 treatment.
Q4 Priorities: Assess scope, choose adoption method (prospective/retrospective), calculate expense, and prepare disclosures.ASU 2023-05 — Joint Venture Formations
Effective: Joint ventures formed on or after January 1, 2025
Who: Entities forming joint ventures
Applies ASC 810 fair value guidance.
Q4 Priorities: Identify 2025 JVs, apply fair value rules, and document disclosures.ASU 2023-06 — Disclosure Improvements
Effective: Fiscal years beginning after December 15, 2023
Who: All entities
Streamlines outdated disclosures.
Q4 Priorities: Eliminate unnecessary disclosures and update financial statements.
Private Companies
ASU 2023-02 — Tax Credit Investments
Effective: Fiscal years beginning after December 15, 2024
Who: Entities with tax credit investments
Expands proportional amortization method.
Q4 Priorities: Elect method, calculate 2025 amortization, and prepare disclosures.ASU 2018-12 — Long-Duration Insurance Contracts
Effective: Fiscal years beginning after December 15, 2024; interim periods after December 15, 2025
Who: Insurance entities with long-duration contracts
Overhauls contract accounting.
Q4 Priorities: Finalize measurement, transition adjustments, and disclosures, coordinating with actuaries.ASU 2023-07 — Enhanced Segment Reporting Disclosures
Effective: Fiscal years beginning after December 15, 2024
Who: Private entities reporting segments
Requires CODM-reviewed expense disclosures.
Q4 Priorities: Confirm segment applicability, prepare 2025 disclosures, and leverage public company examples.ASU 2023-06 — Disclosure Improvements
Effective: Fiscal years beginning after December 15, 2023
Who: All entities
Streamlines disclosures.
Q4 Priorities: Eliminate outdated disclosures and update financial statements.
Looking Ahead to 2026 Reporting and Beyond
Public Companies
ASU 2024-03 — Disaggregation of Income Statement Expenses (DISE)
Effective: Annual periods beginning after December 15, 2026; interim periods after December 15, 2027
Who: All entities (private companies expect 2028/2029, pending FASB)
Requires expense breakdowns (e.g., inventory, compensation).
Q4 Priorities: Conduct gap analysis, pilot TAA tools for data capture, draft SAB 74 disclosures for Q4 10-K, plan SOX 404 updates, and consider early adoption.ASU 2024-04 — Induced Conversions of Convertible Debt
Effective: Annual periods beginning after December 15, 2025
Who: Entities with convertible debt
Clarifies induced conversion accounting.
Q4 Priorities: Identify convertible debt, model impacts, draft SAB 74 disclosures, and update policies.PCAOB QC 1000 — New Quality Control Standard
Effective: Audits of fiscal years ending on or after December 15, 2026
Who: Public company audit committees
Introduces risk-based quality control with TAA tools.
Q4 Priorities: Discuss auditors’ TAA tool plans, assess audit scope impacts, and budget for 2026 costs.
Private Companies
ASU 2024-01 — Profits Interests and Similar Awards
Effective: Annual periods beginning after December 15, 2025
Who: Private entities issuing profits interests
Clarifies ASC 718 treatment.
Q4 Priorities: Inventory awards, assess scope, and plan 2026 adoption.ASU 2023-09 — Improved Income Tax Disclosures
Effective: Annual periods beginning after December 15, 2025
Who: Private entities subject to income taxes
Requires enhanced tax disclosures.
Q4 Priorities: Assess tax data systems, plan 2026 processes, and consider voluntary impact disclosures (no SAB 74 required).ASU 2024-02 — Codification Improvements
Effective: Fiscal years beginning after December 15, 2025
Who: All entities
Clarifies Codification.
Q4 Priorities: Review amendments and update policies.ASU 2024-04 — Induced Conversions of Convertible Debt
Effective: Annual periods beginning after December 15, 2025
Who: Entities with convertible debt
Clarifies induced conversion accounting.
Q4 Priorities: Identify convertible debt, model impacts, and update policies.ASU 2023-08 — Crypto Asset Accounting
Effective: Fiscal years beginning after December 15, 2025
Who: Private entities with crypto assets
Requires fair value measurement.
Q4 Priorities: Document holdings, establish valuation methods, and consider TAA tools for calculations.ASU 2024-03 — Disaggregation of Income Statement Expenses (DISE)
Effective: Expected for annual periods beginning after December 15, 2028 (pending FASB)
Who: All private entities
Requires expense disclosures.
Q4 Priorities: Monitor FASB, assess system readiness, and explore TAA tools for future audits.
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