New Accounting Standards
Accounting Standards Update 2023-09 – “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”)
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, which is intended to enhance the transparency and decision usefulness of income tax disclosures. We adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025. The adoption did not have a material impact on our financial statements or disclosures other than the addition of incremental disclosures intended to enhance and expand our annual effective tax rate reconciliation disclosure and income taxes paid disclosure. See Footnote 4 “Income Taxes” for the additional disclosures required by the adoption of ASU 2023-09.
Future Adoption of Accounting Standards
Accounting Standards Update 2024-03 - “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”)
In November 2024, the FASB issued ASU 2024-03, which requires additional information about specific expense categories in the notes to financial statements for both interim and annual reporting periods. This update is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, and may be adopted on a prospective or retrospective basis, with early adoption permitted. We are evaluating the impact that the adoption of this update, including the timing of implementation, will have on our disclosures.
Accounting Standards Update 2024-04 - “Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” (“ASU 2024-04”)
In November 2024, the FASB issued ASU 2024-04, which requires an entity to account for certain early settlements of convertible debt instruments as an induced conversion if the inducement offer includes the issuance of all consideration (in form and amount) issuable under the conversion privileges provided in the terms of the existing convertible debt instrument. This update is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted for all entities that have adopted the amendments in ASU 2020-06. We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method. We expect to adopt ASU 2024-04 effective January 1, 2026 with no material impact to our financial statements and disclosures.
Accounting Standards Update 2025-05 - “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”)
In July 2025, the FASB issued ASU 2025-05, which introduces a practical expedient for estimating expected credit losses on current accounts receivable and contract assets. Under this expedient, entities may assume that conditions
existing at the balance sheet date will persist for the remaining life of the asset, which simplifies the estimation process by eliminating the need to forecast future economic conditions for short-term assets. This update is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods, and is to be adopted on a prospective basis, with early adoption permitted. We are evaluating the impact of ASU 2025-05 but do not expect a material impact on our financial statements and disclosures.