FASB Close to Finalizing Consolidation Standard
During a recent follow up to a May 16 discussion concerning its upcoming Accounting Standards Update, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, the Financial Accounting Standards Board (“FASB”) agreed on an effective date and transition requirements for private entities. Per decisions made at its June 6 meeting, the FASB announced that private entities will have to apply the guidance in the standard for fiscal years starting after December 15, 2020. Early adoption will be allowed, and private entities must apply the guidance retrospectively with a cumulative-effect adjustment to retained earnings at the start of the. Read More.
FASB Discusses Improvements to Insurance Company-Issued Long-Duration Contracts
Deliberations continued last week on the Financial Accounting Standards Board’s (“FASB”) proposed Accounting Standards Update, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. The proposal aims to improve financial reporting for long-duration contracts issued by insurance companies. In discussing the proposed standard, the FASB focused on the discount rate reset upon initial adoption, affecting the liability for future policy benefits for traditional and limited-payment contracts. The FASB decided to update the modified retrospective transition method discount rate, by which as of the transition date, an insurance company would maintain the discount rate assumption for calculating net premiums. Read More.
CAQ Board Issues Four Grants for Auditing Research
The Center for Audit Quality’s (“CAQ”) Research Advisory Board grant program recently announced it will fund the following academic research projects focused on how audits are conducted: “How Can Audit Committee Support Improve Auditors’ Application of Professional Skepticism?” by Joseph F. Brazel (North Carolina State University), Anna Gold (Vrije Universiteit Amsterdam), and Tammie Schaefer (University of Missouri – Kansas City) “‘Alexa, Audit Loan Grades’: Enhancing Auditor Reliance on Artificial Intelligence Through Anthropomorphism” by Sean Dennis and Benjamin P. Commerford (University of Kentucky) “Encouraging Relational Thinking to Enhance Auditor Use of Audit Data Analytics Output” by Cassandra Estep, Bright Hong, and. Read More.
AICPA and Credit Union Advocate Seek New Credit Loss Standard Effective Date
Despite non-public entities already receiving an extra year to comply with the Financial Accounting Standards Board’s (“FASB”) new credit loss standard, the American Institute of Certified Public Accountants (“AICPA”) and the Credit Union National Association (“CUNA”) seek another extension. Both organizations want the FASB to amend the effective date of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as well as give privately held banks and credit unions until January 1, 2022, to implement the guidance. Non-public businesses like private community banks and credit unions must apply the new. Read More.
Topics: Accounting Standards Update "ASU", AICPA, Community Banks, Credit Loss Model "CECL", Credit Union National Association, Credit Unions, FASB, FASB credit loss standard, Financial Instruments - Credit Losses (Topic 326)
NAICU Partially Supports Federal Student-Level Database
The National Association of Independent Colleges and Universities (“NAICU”) is considering changing its stance regarding the federal government’s efforts to collect data on college student outcomes. NAICU president David Warren said the private college group is open to supporting the Student Right to Know Before You Go Act, a bill that would make colleges increase student data disclosures to the government. Warren noted, however, that the NAICU still opposes a student-level database that some public college advocates prefer. Despite the NAICU’s partial support, proponents of a student-level data system believe Warren’s remarks are a positive step toward creating more extensive. Read More.
COSO Releases Enterprise Risk Management Supplement
A supplement to Enterprise Risk Management – Integrating with Strategy and Performance was recently published by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Issued as Enterprise Risk Management: Integrating with Strategy and Performance – Compendium of Examples, the new guidance features detailed examples for applying principles from the revised Enterprise Risk Management Framework. It also includes illustrations and case studies developed from industry practices recognized through comprehensive research (e.g., interviews, case studies). The examples offer context to the industry wherein the illustrated business operates, highlights applicable principles, shows how Enterprise Risk Management (“ERM”) is integrated with the business. Read More.