NextPlat Corp New Standards Disclosure

Recent Accounting Pronouncements

 

Accounting Pronouncements Recently Adopted

 

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, (“ASU 2024-03”), which is intended to enhance transparency into the nature and function of expenses. The amendments to Subtopic 220-40 require that on an annual and interim basis, entities disclose disaggregated operating expense information about specific categories, including purchases of inventory, employee compensation, depreciation, amortization and selling expense. The Company early adopted this ASU, effective January 1, 2025, on a retrospective basis. The amendments are presentation matter revisions and did not have an impact on the Company’s financial condition, results of operations, or cash flows. 

 

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740)—Improvements to Income Tax Disclosure” (“ASU 2023-09”), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements primarily relating to the rate reconciliation and income taxes paid. This includes a tabular reconciliation using both percentages and reporting currency amounts, covering various tax and reconciling items, and disaggregated summaries of income taxes paid during the period. ASU 2023-09 is required to be adopted for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this accounting standard update effective January 1, 2025 and did not have an impact on the Company’s financial condition, results of operations, or cash flows.

 

Accounting Pronouncements Issued but not yet Adopted

 

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements,” which is intended to clarify and improve the guidance in Topic 270, Interim Reporting. The amendments clarify the applicability of interim reporting guidance, the types of interim reporting, the form and content of interim financial statements and notes prepared in accordance with U.S. GAAP, and establish a principle for disclosing events and changes since the end of the last annual reporting period that have a material impact on the entity. The amendments are not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities, with early adoption permitted. The Company has not yet adopted ASU 2025-11 and does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

 

In December 2025, the FASB issued ASU 2025-12, “Codification Improvements,” which includes numerous amendments across a broad range of Topics to clarify existing guidance, correct errors, and otherwise improve the usability and consistency of the Accounting Standards Codification. Key areas addressed include clarifications to the diluted earnings per share calculation when a loss from continuing operations exists, clarification of disclosure requirements for lease receivables arising from certain leases, revisions to the reference amount for beneficial interests, and other technical improvements. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company does not expect the adoption of ASU 2025-12 to have a material impact on its consolidated financial statements.

 

Income Tax Legislation

 

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (“OBBBA”), which included amendments to certain provisions of the Internal Revenue Code. OBBBA included provisions that affect research and development expenditures, bonus depreciation, the Section 163(j) business interest expense limitation, and the calculation of the Corporate Alternative Minimum Tax. In addition, the OBBBA imposes a 1% excise tax on certain stock repurchases, which is accounted for as a non-income tax expense and recognized within operating expenses when incurred.

 

In accordance with ASC 740, Income Taxes, the Company evaluated at the enactment date the impact of the legislation on its income tax accounting, including the measurement of deferred tax assets and deferred tax liabilities and valuation allowance.  Because the Company maintains a full valuation allowance against its net deferred tax assets, the enactment of the OBBBA did not have a material effect on the Company’s consolidated financial statements for the year ended December 31, 2025.