NOTE 17 - IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
In December 2023, FASB issued amended guidance on Income Taxes: Improvements to Income Tax. The amendments require the Company to provide further disaggregated income tax disclosures for specific categories on the effective tax rate reconciliation, as well as additional information about federal, state/local and foreign income taxes. The standard also requires the Company to annually disclose its income taxes paid (net of refunds received), disaggregated by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is to be applied on a prospective basis, although optional retrospective application is permitted. The Company adopted this standard retrospectively effective with
our December 31, 2025 year end reporting.
The standard required additional disclosures related to the Company’s income
taxes and did not have an impact on the Company’s results of operations or cash
flows due to the adoption of this guidance.
In November 2024, FASB issued amended guidance which requires disaggregated disclosure of income statement expenses for public business entities. The guidance does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted.
In September 2025, the FASB issued guidance that
amends the existing standard to remove all references to prescriptive and
sequential software development project stages. Under this guidance, eligible software
development costs will begin capitalization when management has authorized and
committed to funding the software project, and it is probable that the project
will be completed and the software will be used to perform the function
intended. In evaluating whether it is
probable the project will be completed; management is required to consider
whether there is significant uncertainty associated with the development
activities of the software. This
guidance is effective for all annual periods beginning after December 15, 2027,
and for interim periods within those annual reporting periods, with early
adoption permitted. The guidance may be
applied on a prospective basis, a modified basis for in-process projects, or a
retrospective basis. We are currently
evaluating the impact of this guidance to determine the impact on the
consolidated financial statements and related disclosures.
About New Standards Disclosures
New accounting standards disclosures describe recently adopted pronouncements and those not yet effective, along with management's assessment of their expected impact. This section provides an early warning system for upcoming changes to how a company reports its financial results, often years before the new rules take effect.
Key signals: when management describes a not-yet-adopted standard's impact as "material" or "still being evaluated," it signals potential significant changes to reported metrics upon adoption. Watch for standards that affect a company's core operations — for example, revenue recognition changes for software companies or lease accounting changes for retailers with large store footprints. The transition method chosen (full retrospective versus modified retrospective) affects comparability with prior periods. Companies that delay adoption to the latest permitted date may be struggling with implementation complexity. Compare the disclosed impact assessments against peers in the same industry to gauge whether management's expectations are reasonable.