2018 Audit Committee Transparency Barometer Released
The Center for Audit Quality and Audit Analytics have issued the fifth edition of their Audit Committee Transparency Barometer , an annual report aimed to help companies and audit committees improve how they communicate to investors, regulators and the public. Per this year’s report, investors and other stakeholders continue to have more information disclosed to them. In addition, more S&P 500 companies are disclosing their considerations in appointing an audit firm, and sharing criteria for reviewing an audit firm. Download the 2018 Audit Committee Transparency Barometer from the Center for Audit Quality website.
Task Force Proposes Amended Accounting for TV Production
In response to the rapidly evolving television production and distribution business models like online streaming services, the Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“EITF”) has proposed an update to U.S. GAAP. Issued by the FASB as Proposed Accounting Standards Update (“ASU”) No. 2018-280, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, a Consensus of the FASB’s Emerging Issues Task Force, the proposal would update Accounting Standards Codification (“ASC”) 926-20, Entertainment—Films—Other Assets—Film Costs, to require television show creators to account for production costs similarly. Read More.
Group of Banks Ask FASB to Change Credit Loss Standard
Twenty-one regional banks are asking the Financial Accounting Standards Board (“FASB”) to consider a different approach for calculating loan loss under Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In a letter submitted last week to the FASB, the group of banks warned that the credit loss standard could lessen regulatory capital and cause banks to restrict their lending in economic downturns. The regional banks propose amending the requirement for recognizing credit losses to alleviate any drastic changes in earnings and mitigate problems the standard may cause with. Read More.
SEC Updates Disclosure Rules for Mining Companies
Mining companies must give investors more comprehensive details on their properties. The decision is a result of the Securities and Exchange Commission’s (“SEC”) issuance of Release No. 33-10570, Modernization of Property Disclosures for Mining Registrants. Release No. 33-10570 requires mining companies to make available certain specified information regarding mineral resources and mineral reserves, which would help investors make better decisions. The final rules also bring the SEC’s disclosure requirements for mining companies more in line with industry practices and the Committee for Reserves International Reporting Standards. The final rules will be effective 60 days after being published in the Federal Register,. Read More.
FASB Distinguishes Revenue and Collaborative Arrangements Standards
In its efforts to clarify when collaborative arrangements between companies generate revenue instead of payments between partners, the Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) No. 2018-18— Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. Per the narrow update, when a collaborative participant acts as a customer, the contract should be accounted for under Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. The accounting must include the recognition, measurement, presentation, and disclosure provisions. ASU No. 2018-18 also allows companies to disclose units of account in collaborative arrangements within the. Read More.
FASB Improves Consolidation Guidance for Private Companies
Private companies’ headaches over consolidation accounting have been alleviated with the Financial Accounting Standards Board’s (“FASB”) new Accounting Standards Update (“ASU”). The standard, ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, supersedes the FASB’s 2014 exception that gave private companies the option not to consolidate variable interest entities in common control leasing agreements. The private company exception can now be applied to any qualifying common control agreement. By meeting certain criteria, a private company can make an accounting policy election to forgo applying VIE guidance to legal entities under common control. If a. Read More.