In December 2023, the FASB issued ASU No. 2023-09,
Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the income tax rate reconciliation and income taxes paid information. The guidance in ASU 2023-09 is effective on an annual basis and will be required to be applied for the year ending December 31, 2026 for EGCs under the JOBS Act accounting election. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The guidance should be applied on a prospective basis, but retrospective application is permitted.In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-09), which requires additional disclosure of certain costs and expenses within the notes to the financial statements. The guidance in ASU 2024-03 is effective for annual reporting periods beginning with the year ending December 31, 2027, and for interim reporting periods beginning in 2028. Early adoption is permitted and the guidance may be applied on a prospective or retrospective basis.
Given the disclosure focus of both ASU 2023-09 and ASU 2024-03, the applications of these new standards will not have an effect on the Company’s financial position and results of operations in its consolidated financial statements.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05), which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue From Contracts with Customers. The practical expedient allows an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The guidance in ASU 2025-05 is effective on an annual and interim basis, and will be required to be applied for the year ending December 31, 2026 for public business entities, with early adoption permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The guidance should be applied on a prospective basis.
In September 2025, the FASB issued ASU 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), which amends certain aspects of the accounting for and disclosure of software costs, including eliminating consideration of software project development stages and providing enhanced guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. The guidance in ASU 2025-06 is effective on an annual and interim basis, and will be required to be applied for the year ending December 31, 2028 for public business entities, with early adoption permitted as of the beginning of an annual reporting period. The guidance may be applied on a prospective, retrospective, or modified prospective basis.
The Company is currently evaluating the impact of the adoptions of ASU 2025-05 and ASU 2025-06 on the Company’s consolidated financial statements.