New Accounting Pronouncements
Adoption of New Accounting Standards
Improvements to Income Tax Disclosures
In December 2023, the FASB issued new accounting guidance under ASC 740, Income Taxes, which requires additional income tax disclosures on an annual basis, including disaggregation of information presented within the reconciliation of the expected tax to the reported tax by specific categories, with certain reconciling items 5% or greater broken out by nature and/or jurisdiction. The new guidance also requires disclosure of income taxes paid, net of refunds, broken out by federal, state/local and foreign, including disclosure of individual jurisdictions when greater than 5% of total net income taxes paid. The new guidance was effective for Aon for the year ended December 31, 2025 and was adopted on a prospective basis. The adoption of this guidance impacted the Company’s Notes to Consolidated Financial Statements and did not impact the financial condition or results of operations. See Note 10 “Income Taxes” for information with respect to this guidance as of December 31, 2025.
Accounting Standards Issued But Not Yet Adopted
Accounting for and Disclosure of Software Costs
In September 2025, the FASB issued new accounting guidance under ASC 350-40, Intangibles — Goodwill and Other Internal-Use Software to modernize the criteria for capitalizing software development costs by removing references to development stages and framework updates to better reflect current software development practices. The new guidance is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact the new guidance will have on the Consolidated Financial Statements and Notes.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued new accounting guidance under ASC 220, Income Statement — Reporting Comprehensive Income, which requires more detailed information about certain expenses in commonly presented expense captions including inventory, employee compensation, depreciation, and amortization. The new guidance also requires disclosure of total selling expenses and, on an annual basis, an entity’s definition of selling expenses. The new guidance is effective for the year ended December 31, 2027, with early adoption permitted. Entities may apply the new guidance on a prospective basis, with the option for retrospective application. The company is currently evaluating the impact the guidance will have on the Notes to Consolidated Financial Statements.