PERRIGO Co plc New Standards Disclosure
| Standard | Description | Effective Date | Effect on the Financial Statements or Other Significant Matters | |||||||||||||||||
ASU 2023-09: Income Taxes Topic 740: Improvements to Income Tax Disclosures | This guidance requires entities to annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate). | January 1, 2025 | As of January 1, 2025, we have adopted ASU 2023-09. This standard is adopted on a prospective basis. Refer to Footnote 19 -Income Taxes for disclosure impact. | |||||||||||||||||
ASU 2025-05: Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets | This guidance simplifies the estimation of credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606 | January 1, 2026 for annual periods and interim periods within the fiscal year | As of January 1, 2025, we have early adopted ASU 2025-05. This standard is adopted on a prospective basis. | |||||||||||||||||
ASU 2025-06: Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software | This guidance clarifies and modernizes the accounting for costs related to internal-use software and is intended to address stakeholder feedback that the current guidance is outdated and not relevant given the evolution of software development. The guidance removes all references to project stages and clarifies the threshold entities apply to begin capitalizing costs. | January 1, 2028 and interim periods within the fiscal year | As of January 1, 2025, we have early adopted ASU 2025-06. This standard is adopted on a prospective basis. | |||||||||||||||||
ASU 2024-03: Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ASU 2025-01: Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date | This guidance aims to provide more detailed information about expenses to help investors better understand an entity's performance, assess future cash flows, and compare performance over time and with other entities. Entities must disclose specific quantitative and qualitative information about certain costs in the notes to financial statements. | January 1, 2027 for annual periods, January 1, 2028 for interim periods | As of December 31, 2025, we are currently evaluating the potential disclosures impact of adopting the standard and whether to adopt retrospectively. | |||||||||||||||||
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.