ACCT 635 Week 8 Individual Research Project Presentation Example

What Four New FASB Updates Reveal in Target's Fiscal 2025 10-K: A Narrated Presentation of the Research Project

Slide 1: New Disclosure Standards in Target's 10-K

• Fiscal year ended January 31, 2026
• Four FASB updates, one retailer

Speaker notes: Welcome. In this project I traced four recent FASB updates through Target Corporation's latest annual report, covering the twelve months that closed at the end of January 2026. I want to show you what an investor can now see in that report that was hidden a few years ago, and whether that new information is worth what it costs to produce.

Slide 2: The Research Question

• What do the updates change in the 10-K?
• Do they make the report more decision-useful?

Speaker notes: My question has two parts. First, what have these updates actually changed in Target's filing? Second, judged by the conceptual framework, do the changes make the report more useful to investors and lenders? I chose the framework as my test because it is the standard the FASB itself uses, so it is a fair way to grade the board's work.

Slide 3: Why Target

• Net sales of $104.8 billion; one reportable segment
• Large supplier program; over $1 billion of income tax

Speaker notes: Target is a good test case because each update touches something important in its business. It has very large sales, it reports just one segment, it uses a supplier finance program on a large scale, and its income tax payments run past $1 billion a year. Every one of the four updates lands on a part of Target's business that investors already care about. So all four updates matter to someone reading its 10-K (Target Corporation, 2026).

Slide 4: Supplier Finance Programs (ASU 2022-04)

• Obligation: $3.7 billion to $3.0 billion
• Added $11.4 billion; settled $12.1 billion

Speaker notes: The supplier finance update requires a roll-forward of what the company owes through bank programs that pay its suppliers early (Financial Accounting Standards Board [FASB], 2022). Target's roll-forward shows the balance fell from about $3.7 billion to $3.0 billion, with more than $11 billion flowing in and out during the year. What that tells me is that this program is a big, active part of how Target manages its payables, something an investor simply could not see before.

Slide 5: Segment Reporting (ASU 2023-07)

• One operating segment, one reportable segment
• Now: significant expenses the decision maker reviews

Speaker notes: The segment update applies all segment disclosures even to companies with one segment, including the significant expenses the chief operating decision maker reviews (FASB, 2023a). For Target, the totals match the income statement, so the value is in the categories and the explanation of how management uses its profit measure. I rate this as the smallest gain of the four for Target, though it would matter more for a diversified company.

Slide 6: Income Taxes (ASU 2023-09)

• Statutory charge $1,001 million; effective rate 22.3%
• Taxes paid $1,091 million; $781 million federal

Speaker notes: This is the clearest improvement. In its first year under the new rules, Target shows its rate reconciliation in dollars: state and local taxes add $168 million and credits subtract $77 million (FASB, 2023b; Target Corporation, 2026). It also breaks out taxes paid by jurisdiction. Researchers have long said that financial statements made it hard to work out what a company really pays in tax (Hanlon, 2003), and this note directly answers that complaint.

Slide 7: Expense to Cash

• Fiscal 2023: expense $1,159 million; paid $374 million
• Fiscal 2025: expense $1,062 million; paid $1,091 million

Speaker notes: Here is why the cash figure matters. In fiscal 2023, Target's tax expense and the taxes it actually paid were almost $800 million apart. In fiscal 2025, they were close. An analyst who forecast cash using expense alone would have been badly wrong in that earlier year. The new jurisdictional detail on taxes paid makes gaps like this easier to trace.

Slide 8: Expense Disaggregation (ASU 2024-03)

• Cost of sales $75.5 billion; SG&A $21.5 billion
• Detail required for years beginning after December 15, 2026

Speaker notes: The update still to come will open up Target's largest expense lines, showing inventory purchases, employee pay and depreciation inside cost of sales and inside selling, general and administrative expense (FASB, 2024). Research on companies that already did this voluntarily found the cost of sales detail useful to investors and the SG&A detail much less so (Blann & Moon, 2026). So I expect the cost of sales breakdown to be the part analysts use most.

Slide 9: Ranking the Four Updates

• First: income taxes; second: supplier finance
• Third: expense disaggregation; fourth: segments

Speaker notes: Putting it together, I rank the income tax update first, because it adds large, cash-linked information. Supplier finance comes second, because it reveals an arrangement that used to be invisible. Expense disaggregation is third for now, only because it has not arrived yet. Segment reporting is last for Target, though not for every company. In each case the cost to Target is modest, because most of these figures already exist inside the company.

Slide 10: Limitations

• One company, mostly domestic, one segment
• Reads disclosures; does not measure investor use

Speaker notes: Two limits deserve a candid word. I studied one company, and a multinational with many segments would show bigger effects from the segment and tax rules. I also read the disclosures rather than measuring how investors used them, so my judgments lean on theory and on research about other firms.

Slide 11: Transparency as Stewardship

• Show others what management already sees

Speaker notes: When Paul handled a gift entrusted to him, he made sure his conduct would bear inspection by people as well as by God (English Standard Version Bible, 2001/2016, 2 Corinthians 8:21). That is a good description of what these updates ask: that a company show its owners what management already sees. Clear disclosure is a form of stewardship over resources other people have entrusted to the company.

Slide 12: What to Watch Next

• First disaggregated expense note
• Size of the supplier program; taxes paid by jurisdiction

Speaker notes: If you follow Target, watch three things in coming filings: the first expense disaggregation note, whether the supplier finance program keeps shrinking, and how taxes paid shift between federal and state as tax policy changes. That concludes my presentation; I welcome your comments in the forum.

References

Blann, J. J., & Moon, J. R. (2026). Income statement expense disaggregation. The Accounting Review, 101(3), 137-165. https://doi.org/10.2308/tar-2023-0545

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Financial Accounting Standards Board. (2022). Accounting standards update No. 2022-04: Liabilities, supplier finance programs (Subtopic 405-50): Disclosure of supplier finance program obligations.

Financial Accounting Standards Board. (2023a). Accounting standards update No. 2023-07: Segment reporting (Topic 280): Improvements to reportable segment disclosures.

Financial Accounting Standards Board. (2023b). Accounting standards update No. 2023-09: Income taxes (Topic 740): Improvements to income tax disclosures.

Financial Accounting Standards Board. (2024). Accounting standards update No. 2024-03: Income statement, reporting comprehensive income, expense disaggregation disclosures (Subtopic 220-40): Disaggregation of income statement expenses.

Hanlon, M. (2003). What can we infer about a firm's taxable income from its financial statements? National Tax Journal, 56(4), 831-863. https://doi.org/10.17310/ntj.2003.4.07

Target Corporation. (2026). Form 10-K: 2025 annual report. U.S. Securities and Exchange Commission.