Where Food Comes From, Inc. New Standards Disclosure

Recent Accounting Pronouncements

 

The Financial Accounting Standards Board (FASB) Accounting Standards Codification is the sole source of authoritative GAAP other than SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update (ASU) to communicate changes to the codification. The Company considers the applicability and impact of all ASU’s. ASU’s not listed below were assessed and determined to be either not applicable or are not expected to have a material impact on the consolidated financial statements.

 

Recently Adopted Accounting Pronouncements

 

On January 1, 2024, we adopted ASU 2023-07, Segment Reporting (Topic 28); Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The Company adopted this update January 1, 2024 for annual reporting and January 1, 2025 for quarterly reporting. Management determined the extent of the reporting enhancements to be nominal.

 

 

Where Food Comes From, Inc.

Notes to the Consolidated Financial Statements

 

Effective January 1,2024, we early adopted ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60); Accounting for and Disclosure of Crypto Assets, which better reflects the economics of crypto assets, measuring those assets at fair value versus the current cost-less-impairment accounting model. An entity is required to measure crypto assets at fair value with changes recognized in net income each reporting period and report the crypto asset fair value separately from other intangible assets in the balance sheet. As of the effective adoption date, management determined the cumulative retained earnings impact, net of taxes, was $0.1 million.

 

Effective January 1, 2025, we adopted ASU 2023-09, Income Taxes (Topic 740); Improvements to Income Tax Disclosures, which enhance the transparency and decision usefulness of tax disclosures. The Company adopted this update January 1, 2025 for annual reporting. See Note 10 for the additional tax disclosures.

 

Recently Issued Accounting Pronouncements

 

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, which will modify the disclosure or presentation requirements of a variety of Topics in the Codification. The updates align the requirements in the Codification with the SEC’s regulations. The effective date is anticipated to be June 30, 2027. At this time, management has not determined the impact on its financial statements.

 

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which improves disclosures of an entity’s expense by providing more detailed information about the types of expenses in commonly presented expense captions. The Company will be required to adopt this update January 1, 2027 for interim and annual reporting. At this time, management is determining the extent of enhanced disclosures on its financial statements.

 

In January 2025, the FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the initial effective date. The Company will be required to adopt this update January 1, 2027 for annual reporting and January 1, 2028 for interim reporting. At this time, management is determining the extent of enhanced disclosures on its financial statements.

 

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for software costs that are accounting for under Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software. The Company will be required to adopt this update January 1, 2028 for annual and interim reporting, with early adoption permitted. At this time, management is determining the impact on its financial statements.

 

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, to improve the navigability of the required interim disclosures and clarifying when that guidance is applicable and provides additional guidance on what disclosures should be provided in interim reporting periods. The Company will be required to adopt this update January 1, 2028 for annual reporting periods and January 1, 2029 for interim reporting periods. At this time, management is determining the extent of the impact to the disclosures on its financial statements.