Frequently Asked Questions on ASU 2014-02
Since posting our alert , we’ve started to receive some questions about Accounting Standards Update (ASU) 2014-02. In response, we’ve taken the most popular questions and turned them into a FAQ. We hope you enjoy. Q: So what does ASU 2014-02 do? A: If a private company, as defined, makes an accounting policy election to adopt the goodwill alternative allowed by this ASU, existing goodwill (on a prospective basis) and all newly created goodwill will no longer be subjected to annual impairment testing. Instead, goodwill will be amortized over 10 years or a shorter life if that is more representative. In. Read More.
Report on Fraud Protection Available for Download
Currently available on its website, the Journal of Accountancy offers a special report for not-for-profits (“NFPs”). The report, “How to Reduce Fraud Risk at Not-for-Profits,” features practical tips NFPs can use to protect themselves from fraud vulnerability. To receive a free copy, click here and complete the required portions of the form.
2014 U.S. GAAP Financial Reporting Taxonomy Released
Announced earlier this week, the Financial Accounting Foundation (“FAF”) and Financial Accounting Standards Board (“the Board”) has adopted the 2014 U.S. GAAP Financial Reporting Taxonomy . Used by U.S. Securities and Exchange Commission (“SEC”) issuers, the new taxonomy improves upon last year’s edition and offers accounting standard updates. Both the FAF and Board share responsibility for revisions to the taxonomy, which affects SEC-registered public issuers. For guidance on applying the new taxonomy for submitting SEC-compliant eXtensible Business Reporting Language-tagged interactive data files or any other related questions, please contact the SEC .
New PCAOB Standard & Amendments to Improve Auditing Process
Enhancing auditor performance requirements, the Public Company Accounting Oversight Board (“PCAOB”) has adopted a new standard and amendments reflecting three essential areas of the auditing process. Agreed upon at its recent meeting, the PCAOB concluded that current requirements in the related areas of the auditing process provide insufficient mandated procedures and are inadequately risk-based. Further, inspection and enforcement activities show these areas continue to be major weaknesses among auditors. As a result, the PCAOB has implemented Auditing Standard No. 18, Related Parties (“AS 18”). Taking the place of interim standard AU sec. 334, Related Parties, AS 18 reflects transactions and. Read More.
A Push for Fewer Discontinued Operations
Overview In April 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Starting as a short-term convergence project with the International Accounting Standards Board in 2006, the end result was a multiyear effort to identify what events truly should qualify as a discontinued operation. The ASU changes the criteria for reporting a discontinued operation, which should reduce the number of items reported below income from continuing operations. Also, the ASU reduces the implementation guidance while increasing disclosure requirements. Strategic Shift? One criticism about the previous. Read More.
IASB Chairman, Ex-SEC Chair Swap Words over U.S. IFRS Adoption
After hearing former U.S. Securities and Exchange Commission (“SEC”) Chairman Christopher Cox drop support of the U.S. adopting International Financial Reporting Standards (IFRS), International Accounting Standards Board (“IASB”) Chairman Hans Hoogervorst expressed disproval of Cox’s newfound stance. Although Cox supported U.S. adoption last fall, his comments at the June 5th University of Southern California’s Financial Reporting Conference reflect criticisms of the IASB and the IFRS Foundation. Cox claimed the IASB lacked independence from regional predispositions, accountability to regulators and other standard-setting bodies, and believes the board is unresponsive to the country’s interests. Regarding Cox’s reversal of opinion, Hoogervorst reaffirmed the IASB’s support of serving investors, and believed Cox’s viewpoint has changed from. Read More.