We are pleased to release MaloneBailey's January 2025 issue of The Crunch. This special edition of The Crunch highlights FASB updates that went into effect in 2024 as well as a review of the FASB updates will go into effect in 2025 and beyond.


Please note that the updates provided in this newsletter are not a comprehensive list. We encourage you to visit the  SEC  FASB  and IRS websites for more information as well as a complete list of updated rules, regulations and proposals. 


We invite you to contact us should you have any questions about the information provided in this issue. We invite you to visit our website to review archived versions of this newsletter containing past accounting, regulatory and tax updates.


The MaloneBailey Team

www.malonebailey.com 


What's the Crunch?



Featured Podcast


  • Cybersecurity in a CPA Firm Environment


Recent Accounting & Regulatory Updates



FASB: What You Need to Know for 2025


  • Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
  • Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments
  • Business Combinations— Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement
  • Codification Improvements—Amendments to Remove References to the Concepts Statements
  • Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards
  • Income Taxes (Topic 740): Improvements to Income Tax Disclosures
  • Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets
  • Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative


FASB: A Review of 2024 Updates


  • Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
  • Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method
  • Leases (Topic 842): Common Control Arrangements
  • Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
  • Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 121
  • Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X: Income or Loss Applicable to Common Stock



Extra Crunch


  • IR Magazine: The Ticker Podcast


About MaloneBailey, LLP


Featured Podcast

Cybersecurity in the CPA Firm Environment


Summary - Technology has evolved to where we can store everything we need in one convenient place at just the click of a button, however, this convenience comes at a cost as it’s now easier than ever for someone to get into your system and take your sensitive information. It’s important to familiarize yourself and stay a few steps ahead of these looming cyber threats to prepare and train yourself in case there are any attempts of a breach.



Simply click on the image below to listen to the podcast. For this podcast and many more, please visit the Resources section of our website.

FASB: What You Need to Know for 2025

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses


Summary - This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted.                                                           


A public business entity should apply ASU No. 2024-03 prospectively to financial statements issued for reporting periods beginning after the effective date of ASU No. 2024-03. The disclosures required ASU No. 2024-03 do not need to be included in financial statements for reporting periods beginning before the effective date that are being presented for comparative purposes with financial statements issued for periods after the effective date.

 

A public business entity may elect to apply ASU No. 2024-03 retrospectively to any or all prior periods presented in the financial statements. If applied to financial statements for periods beginning before the effective date, those disclosures should be prepared and presented in accordance with this Subtopic.


This ASU requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. Specifically, they will be required to:

  • Disclose the amounts of (a) purchases of inventory; (b) employee compensation; (c) depreciation; (d) intangible asset amortization; and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption.
  • Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements.
  • Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.
  • Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments


Summary - This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.


Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued (or made available for issuance), but no earlier than the adoption of ASU No. 2024-04. If an entity adopts ASU No. 2024-04 in an interim reporting period, it should adopt it as of the beginning of the annual reporting period that includes that interim reporting period. 


This ASU clarifies requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Business Combinations— Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement


Summary - This ASU is effective on a prospective basis for all joint ventures with a formation date on or after January 1, 2025. Early adoption of ASU No. 2023-05 is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance). A joint venture that elects to early adopt may apply ASU No. 2023-05 either prospectively or retrospectively.


This ASU applies to the formation of entities that meet the definition of a joint venture (or a corporate joint venture) as defined in the FASB Accounting Standards Codification® Master Glossary. While joint ventures are defined in the Master Glossary, there has been no specific guidance in the Codification that applies to the formation accounting by a joint venture in its separate financial statements. The amendments in the ASU require that a joint venture apply a new basis of accounting upon formation. As a result, a newly formed joint venture, upon formation, would initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). 


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Codification Improvements—Amendments to Remove References to the Concepts Statements 


Summary - This ASU is effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early application of the amendments is permitted for all entities, for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period.


An entity should apply these amendments using one of the following transition methods:


  • Prospectively to all new transactions recognized on or after the date that the entity first applies the amendments; or
  • Retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented.


This ASU contains amendments to the Codification that remove references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior Statements to provide guidance in certain topical areas.

 

For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards


Summary - This ASU is effective for public business entities for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods.Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes that interim period.


The amendments should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments.


Certain entities, typically private companies, provide employees and other nonemployees with profits interest and similar awards to align compensation with the company’s operating performance and provide those holders with the opportunity to participate in future profits and/or equity appreciation of the company. The Private Company Council and other stakeholders noted diversity in practice in accounting for these awards as share-based payment arrangements under Topic 718 or similar to cash bonus or profit-sharing arrangements (Topic 710, Compensation—General, or other Topics).


The ASU addresses this input by providing an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Income Taxes (Topic 740): Improvements to Income Tax Disclosures


Summary - The ASU is effective for public business entities for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025.


Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.


The amendments should be applied on a prospective basis. Retrospective application is permitted.


Among other things, these amendments require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate).


The amendments require that all entities disclose on an annual basis the following information about income taxes paid: 


  1. The amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes. 
  2. The amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). 


The amendments also require that all entities disclose the following information: 


  1. Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign.
  2. Income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. 


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets


Summary - The ASU is effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period.


ASU No. 2023-08 requires a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments.


The amendments apply to all entities. ASU No. 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period.


The amendments in the ASU apply to all assets that meet all the following criteria:


  1. Meet the definition of intangible asset as defined in the FASB Accounting Standards Codification®.
  2. Do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets.
  3. Are created or reside on a distributed ledger based on blockchain or similar technology
  4. Are secured through cryptography
  5. Are fungible.
  6. Are not created or issued by the reporting entity or its related parties.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative


Summary - For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity.


This ASU incorporates certain U.S. Securities and Exchange Commission (SEC) disclosure requirements into the FASB Accounting Standards Codification™. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations.


In SEC Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles to the FASB for potential incorporation into the Codification.


The ASU incorporates into the Codification 14 of the 27 disclosures referred by the SEC. They modify the disclosure or presentation requirements of a variety of Topics in the Codification. The requirements are relatively narrow in nature. Some of the amendments represent clarifications to, or technical corrections of, the current requirements. Because of the variety of Topics amended, a broad range of entities may be affected by one or more of those amendments.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

FASB: A Review of 2024 Updates

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures


Summary - The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted.


A public entity should apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.


The amendments apply to all public entities that are required to report segment information in accordance with Topic 280, Segment Reporting.


The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The key amendments:


  1. Require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss.
  2. Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the significant expenses disclosed and each reported measure of segment profit or loss.
  3. Require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by FASB Accounting Standards Codification® Topic 280, Segment Reporting, in interim periods.
  4. Clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements.
  5. Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.
  6. Require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures in Topic 280.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method


Summary - This ASU is effective for public business entities for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for all entities in any interim period.


These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. The ASU responds to stakeholder feedback that the proportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for the purpose of receiving income tax credits and other income tax benefits.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Leases (Topic 842): Common Control Arrangements 


Summary - This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. Transition can be done either retrospectively or prospectively.


These amendments provide private companies and not-for-profit organizations that are not conduit bond obligors with a practical expedient to use the written terms and conditions of a common control arrangement to determine whether a lease exists and, if so, the classification of and accounting for that lease.


In addition, the ASU requires all entities (i.e., including public companies) to amortize leasehold improvements associated with common control leases over the useful life to the common control group.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions


Summary - ASU No. 2022-03 is effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted.


For all other entities, it is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.


These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 121


Summary - This ASU amends the FASB Accounting Standards Codification™ for SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 121 which expresses the views of the staff regarding the accounting for obligations to safeguard crypto-assets an entity holds for platform users.


The FASB Codification contains the authoritative standards that are applicable to both public entities and nonpublic entities. Content contained in the SEC sections of the Codification is provided for convenience only and relates only to SEC registrants.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X: Income or Loss Applicable to Common Stock


Summary - This ASU amends the FASB Accounting Standards Codification™ for SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X: Income or Loss Applicable to Common Stock.


The FASB Codification contains the authoritative standards that are applicable to both public entities and nonpublic entities. Content contained in the SEC sections of the Codification is provided for convenience only and relates only to SEC registrants.


For more information, click here.


© 2025 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Extra Crunch

IR Magazine: The Ticker Podcast


Summary - The Ticker brings the world of IR to your ears with the latest insights, comments and research from leading IR professionals, analysts and investors plus the IR Magazine team. Listen, learn, enjoy and subscribe to your monthly editions from wherever you get your podcasts.


To access the podcast, please click here.


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