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2. ACCOUNTING STANDARDS UPDATES
Recently Issued Accounting Pronouncements
Rocky Brands is currently evaluating the impact of certain ASUs on its Consolidated Financial Statements or Notes to the Consolidated Financial Statements:
| Standard | | Description | | Anticipated Adoption Periods | | Effect on Consolidated Financial Statements |
| ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses | | This pronouncement requires disclosure of disaggregated information about certain income statement expense line items within the notes to the consolidated financial statements. | | Q4 2027 (fiscal year) Q1 2028 (interim period) | | The Company is still assessing the impact of the new accounting standard on its consolidated financial statements. |
| ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software | | This pronouncement modernizes the accounting for internal-use software costs by removing all references to prescriptive and sequential software development stages. The new standard requires entities to consider whether significant development uncertainty has been resolved before starting to capitalize software costs and enhances disclosure requirements. | | Q4 2028 (fiscal year) Q1 2029 (interim period) | | The Company is still assessing the impact of the new accounting standard on its consolidated financial statements. |
| ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements | | This pronouncement improves the navigability of the required interim disclosure and clarification around the principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. | | Q4 2027 (fiscal year) Q1 2028 (interim period) | | The Company is still assessing the impact of the new accounting standard on its consolidated financial statements. |
Accounting Standards Adopted in the Current Year
| Standard | | Description | | Effect on the financial statements or other significant matters |
| ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures | | This pronouncement requires expanded income tax disclosures primarily related to an entity's effective tax rate reconciliation and income taxes paid. | | The Company has included all required disclosures within its Form 10-K for the year ended December 31, 2025. See Note 10 - Taxes for further information on income taxes. |
Accounting Standards Adopted in the Prior Year
| Standard | | Description | | Effect on the financial statements or other significant matters |
| ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures | | This pronouncement requires expanded disclosures about an entity’s reportable segments, including more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how an entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. | | The Company has included all required disclosures within its Form 10-K for the year ended December 31, 2025 and 2024. See Note 16 - Segment Information for further information on segment disclosures. |
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes modifications to the international tax framework and amends and extends several provisions of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation, the deductibility of domestic research and development expenses, and the business interest expense limitation. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. There was no significant impact to our effective tax rate as a result of OBBBA in the current year. We will continue to evaluate the impact of OBBBA on our consolidated financial statements and related disclosures for future years.
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