FASB's Latest Accounting Standards Updates (ASUs) – What's Effective in 2026?

Several FASB Accounting Standards Updates reach their effective date for calendar-year 2026 reporters, and the practical burden varies significantly by ASU. The income tax disclosure improvements require a disaggregated rate reconciliation, breaking out categories such as state and local tax, foreign tax rate differentials, and tax credits, along with disaggregated disclosure of income taxes paid by jurisdiction above a materiality threshold.

Separately, the disaggregation of income statement expenses update requires public companies to disclose specified categories of expenses — including purchases of inventory, employee compensation, depreciation and amortisation — within relevant income statement captions such as cost of sales and SG&A, in the notes to the financial statements. This is a granular disclosure exercise that depends on how well general ledger data maps to the new required categories.

A narrower but still relevant update addresses the accounting for induced conversions of convertible debt instruments, clarifying the conditions under which an offer to induce conversion should be accounted for as an extinguishment versus a modification. Companies with convertible debt outstanding should confirm whether recent or planned amendments to conversion terms fall within the updated guidance.

Key actions to take now

• Confirm your entity's effective date and any early-adoption elections already made
• Build the disaggregated expense mapping now — it's a data exercise, not a judgement one
• Review convertible debt terms against the induced conversion guidance
• Brief external auditors on disclosure changes before interim reporting begins