Root, Inc.ROOT
Root, Inc. New Standards Disclosure
Recently Adopted Accounting Pronouncements—In December 2023, the FASB issued Accounting Standards Update, or ASU, No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU 2023-09. This ASU looks to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The main provisions to the rate reconciliation disclosure require public entities on an annual basis to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The main provisions to the income taxes paid disclosure require that all entities disclose on an annual basis the amount of income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid meets a quantitative threshold. This ASU also requires all entities to disclose income (loss) from continuing operations before income tax expense (benefit) disaggregated between domestic and foreign and income tax expense (benefit) from continuing operations disaggregated by federal, state and foreign. ASU 2023-09 became effective for the annual reporting period beginning January 1, 2025, and we adopted the standard as of that date on a prospective basis. The adoption did not have an impact on our results of operations or financial condition.
Recently Issued Financial Accounting Standards Not Yet Adopted—In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies the scope of interim reporting, improves the form and content requirements for interim financial statements, and consolidates interim disclosure requirements within Topic 270. This ASU also introduces a new disclosure principle requiring entities to disclose information about events or changes in circumstances since the last annual reporting period that have a material impact on the company.
This ASU may be applied prospectively or retrospectively with an effective date for public entities for interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the effects of the new standard. We are currently evaluating the impact of this ASU.
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. This ASU removes references to prescriptive and sequential software development stages in the guidance and instead requires entities to capitalize software development costs once management has authorized and committed to funding the project and it is probable that the project will be completed and the software will be used for its intended function. The guidance also requires entities to evaluate whether significant development uncertainty exists, which may delay capitalization until such uncertainty has been resolved. This ASU also specifies that the disclosure requirements in ASC 360-10 are required for all capitalized internal-use software costs.
This ASU may be applied prospectively, retrospectively, or through a modified transition approach with an effective date for all entities for annual reporting periods beginning after December 15, 2027, including interim periods within those reporting periods. Early adoption is permitted. We are currently evaluating the impact of this ASU.
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. This ASU looks to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The main provisions require a company to disclose in the notes to the financial statements the amounts of employee compensation, depreciation, intangible asset amortization and certain other costs and expenses included in each relevant expense caption and include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same disclosure as the other disaggregation requirements. It also requires a company to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.
This ASU is to be applied on a prospective basis with an effective date for the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this ASU.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Mar 4, 2021 | |
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.