CREATIVE REALITIES, INC. New Standards Disclosure

2. Recently Issued and Adopted Accounting Pronouncements

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 effective January 1, 2025 on a retrospective basis. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial condition, results of operations or cash flows since the guidance pertains to disclosure only. See Note 11, Income Taxes for further information.

 

In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. ASU 2024-01 clarifies how an entity should evaluate whether a profits interest or similar award issued as compensation is within the scope of ASC 718 by adding four illustrative examples to ASC 718-10-55. The ASU is effective for public business entities for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2024-01 effective January 1, 2025. The adoption of ASU 2024-01 did not have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

 

In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements. ASU 2024-02 removes various references to the FASB's Concepts Statements from the FASB Accounting Standards Codification, as those references are non-authoritative and their inclusion could imply otherwise. The amendments are effective for public business entities for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2024-02 effective January 1, 2025. The adoption of ASU 2024-02 did not have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

 

In October 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. ASU 2024-04 clarifies the requirements for determining whether a settlement of a convertible debt instrument (or convertible preferred stock classified as a liability) should be accounted for as an induced conversion under ASC 470-20. Specifically, the ASU clarifies that an issuer must assess whether a settlement offer provides the holder with consideration in excess of the original conversion terms — and if so, the transaction must be accounted for as an induced conversion, with any excess consideration recognized as an expense. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted for any date on or after the issuance of the ASU. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

 

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures. ASU 2024-03 is intended to improve disclosures about a public business entity’s expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions. This ASU will be applied retrospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

 

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified that public business entities should initially adopt the disclosure requirements of ASU 2024-03 in an annual reporting period, not an interim period. As clarified by ASU 2025-01, ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of implementing this guidance.

 

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments introduce a practical expedient that permits entities to assume current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable and current contract assets within the scope of ASC 606 when developing reasonable and supportable forecasts of expected credit losses, thereby removing the requirement to incorporate macroeconomic forecasts for those assets. The ASU also provides an accounting policy election to consider post-balance-sheet collection activity in estimating expected credit losses; this election is available only to entities other than public business entities and is therefore not available to the Company. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating whether to elect the practical expedient and the impact, if any, on its consolidated financial statements.

 

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments clarify the scope of ASC 270, specifying its applicability to all entities that provide interim financial statements and notes in accordance with U.S. GAAP, consolidate required interim disclosures into a centralized list within Topic 270, and introduce a disclosure principle requiring disclosure of events and changes occurring after the last annual reporting period that have a material effect on the entity. The amendments are effective for public business entities for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption to have a material impact on its consolidated financial statements, as the amendments primarily clarify existing interim reporting requirements.