INTERNATIONAL BANCSHARES CORP New Standards Disclosure

New Accounting Standards

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, an Amendment.  ASU 2023-09 is intended to enhance transparency and decisions usefulness of income tax disclosures.  ASU 2023-09 requires that public entities disclose specific categories in the annual rate reconciliation and provides additional guidance for reconciling items that meet a quantitative threshold.  

Explanation of individual reconciling items is also required.  ASU 2023-09 also requires certain disclosures regarding income taxes paid, including disaggregation of taxes paid (net of refunds) by federal, state and foreign taxes, including disaggregation by individual jurisdictions in which taxes paid (net of refunds), exceed a quantitative threshold.  The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024.  The adoption of ASU 2023-09 impacted the disclosures included in Note 13 – Income Taxes and did not have an impact on the measurement of the amounts reported in the consolidated financial statements.  We chose to apply the disclosure requirements of ASU 2023-09 retrospectively to all periods reported in the consolidated financial statements.  

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40):  Disaggregation of Income Statement Expenses.  ASU 2024-03 requires new tabular disclosures of certain prescribed income statement expenses, including among other things, employee compensation and depreciation.  Additionally, ASU 2024-03 requires disclosure of selling expenses based upon an entity’s own definition.  The provisions of ASU 2024-03 are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027.  The adoption of ASU 2024-03 is not expected to have a significant impact on our consolidated financial statements.  In January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statements-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) to clarify the initial effective dates for non-calendar year entities.  The adoption of ASU 2025-01 is not expected to have a significant impact on our consolidated financial statements.

In September 2025, the FASB issued Accounting Standards Update No. 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes current accounting guidelines by aligning the accounting for internal-use software costs with current, iterative development methods (such as agile) rather than prescriptive project “stages.” The update removes references to development stages and requires entities to begin capitalizing software development costs when (1) management has authorized and committed to funding the project and (2) it is probable the software will be completed and used as intended, while also relocating website development guidance into existing guidance and clarifying related disclosure requirements. The provisions of ASU 2025-06 are effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods.  The adoption of ASU 2025-06 is not expected to have a significant impact on our consolidated financial statements.

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In November 2025, the FASB issued Accounting Standards Update No. 2025-08, Financial Instruments-Credit Losses (Topic 326): Purchased Loans. ASU 2025-08 simplifies and improves the accounting for acquired loans by expanding the use of the “gross-up” approach at acquisition. Certain acquired loans (excluding credit cards) that qualify as purchased seasoned loans, including all non-purchased financial assets with credit deterioration (PCD) loans acquired in a business combination and other non-PCD loans purchased at least 90 days after origination when the acquirer was not involved in origination, are recognized at purchase price plus an allowance for expected credit losses, aligning the accounting with that of PCD assets and eliminating a Day one credit loss expense and perceived double counting under prior guidance. ASU 2025-08 leaves existing PCD guidance otherwise unchanged. The provisions of ASU 2025-08 are effective for annual periods beginning after December 15, 2026, and interim periods within those annual periods. The adoption of ASU 2025-08 is not expected to have a significant impact on our consolidated financial statements.

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In December 2025, the FASB issued Accounting Standards Update No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. ASU 2025-11 clarifies when and how interim reporting guidance applies and improves the organization and navigability of ASC 270 without changing the fundamental nature or overall volume of interim disclosure requirements. The update specifies that ASC 270 applies to all entities that provide interim financial statements and accompanying notes in accordance with U.S. GAAP, clarifies form and content requirements (including guidance for non-SEC registrants), compiles a comprehensive list of interim disclosures required by other Codification topics, and introduces a principle requiring disclosure of events occurring since the most recent annual reporting period that have a material impact on the entity. The provisions of ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The adoption of ASU 2025 is not expected to have a significant impact on our consolidated financial statements.

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