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The following exceptions were eliminated from Topic 740

 The exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or gain from other items such as discontinued operations or other comprehensive income. Apply on a prospective basis.

 The exception to the requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment. Apply on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of the fiscal year of adoption.

 The exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary. Apply on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of the fiscal year of adoption.

 The exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. Apply on a prospective basis.

The following provisions were added:

 An entity is required to recognize a franchise or similar tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax. Apply on either a retrospective basis for all periods presented or a modified retrospective basis as of the beginning of the fiscal year of adoption.

 An entity is required to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction. Apply on a prospective basis.

 Specifies that an entity is not required to allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements. However, an entity may elect to do so for a legal entity that is both not subject to tax and disregarded by the taxing authority. This election is on an entity-by-entity basis. Apply on a retrospective basis for all periods presented.

 An entity is required to reflect the effect of an enacted change in tax laws or rates in the annual effected tax rate computation in the interim period that includes the enactment date. Apply on a prospective basis.

 Minor codification changes in:Employee stock ownership plansInvestments in qualified affordable housing projects under the equity method