Exzeo Group, Inc. New Standards Disclosure
Recent Accounting Pronouncements
Accounting Standards Adopted in the Current Year
In December 2023, the FASB issued ASU No. 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency of income tax disclosures. This update requires expanded disclosure of the income tax rate reconciliation and additional information about income taxes paid. This standard is effective for fiscal years starting after December 15, 2024, with early adoption permitted. The Company adopted the amendments on a prospective basis effective January 1, 2025, resulting in enhanced income tax disclosures beginning with the Consolidated Financial Statements for the year ended December 31, 2025.
Accounting Standards Issued but Not Yet Adopted
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 update enhances guidance on the capitalization of software development costs by eliminating project phase-based criteria and clarifying the conditions signifying significant development uncertainty used by entities to evaluate when the probable-to-complete recognition threshold is met. This standard is effective for all entities for fiscal years and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the potential impact of these updates on its Consolidated Financial Statements.
In July 2025, the FASB issued ASU No. 2025-05 - Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This update simplifies the estimation of current expected credit losses on current accounts receivable and current contract assets related to revenue from contracts with customers by allowing all entities to assume that current conditions as of the balance sheet date will not change for the remaining life of the current accounts receivable and current contract assets. This standard is effective for all entities for fiscal years and interim periods beginning after December 15, 2025. Early adoption is permitted. The Company is evaluating the potential impact of these updates and does not expect adoption to have a material impact on its Consolidated Financial Statements.
In March 2025, the FASB issued ASU No. 2025-01 Codification Amendments in Response to the SEC's Adoption of Rules Related to the Disaggregation of Income Statement Expenses, which clarifies transition provisions but does not change the underlying disclosure requirements. ASU 2024-03 and ASU 2025-01 are effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the potential impact of these updates on its disclosures.
In November 2024, the FASB issued ASU No. 2024-03 - Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40), which enhances disclosure requirements for public entities by requiring the disaggregation of certain expense captions presented within the income statement, including employee compensation and intangible asset amortization. This ASU also requires entities to reconcile each affected income statement caption to the aggregate amount of the separately disclosed expense categories with any remaining difference described qualitatively as "other items."
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.