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Financial Services

FASB Calls for Eliminating Available-for-Sale Category

Attempting to reduce equity securities to two classifications, the Financial Accounting Standards Board (“FASB”) plans to review feedback from regulators on how the change would impact their supervision of the banking industry. Planned ahead of FASB’s upcoming meeting, the feedback will help the standard setter decide which of the three classifications to eliminate. FASB’s top choice for removal is “available-for-sale”, a category used for financial instruments assessed at fair value, but include changes in value noted in other income yet has no effect on net income. “Available-for-sale” also applies to instruments that the holder anticipates to keep unless urged to. Read More.

2014 U.S. GAAP & SEC Review Developments

As the year winds to a close, it is important to remember the recently issued rules and regulations from the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”) that could affect your company’s year-end financial reporting. Keeping these rules and regulations in focus not only ensures they are considered in your year-end reporting, but also allows for consideration of alternative adoption methods often provided for in the issuances. This issue of  A Closer Look , published by Accounting Research Manager®, a Wolters Kluwer, CCH premier research solution, summarizes these rules and regulations, as well as the SEC documents that provide. Read More.

Final Rule Affects Bank Holding Companies

In October, the Federal Reserve System’s Board of Governors has approved a final rule that amends certain parts of the current capital plan and stress test rules for various banking companies. Approved in October, the capital plan rule allows the Federal Reserve to review the internal capital planning procedure of a large bank holding company (BHC) with total consolidated assets of $50 billion or more, and its ability to uphold satisfactory capital to operate under anticipated and stressful conditions. The stress test rules also require large BHCs to perform yearly and mid-cycle company-run stress tests. Further, under the Comprehensive Capital. Read More.

FASB Discusses Impairment Model Project

At its meeting two weeks ago, the Financial Accounting Standards Board (“FASB”) discussed one of unresolved issues from Proposed Accounting Standards Update No. 2013-220, Financial Instruments—Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. The issue in question was the requirement for recording equity method investments. Per the proposal, equity method investments would go through a one-step test before being marked down. However, the approach was questioned in comment letters, and FASB has contemplated whether to drop the provision or create an alternative approach. Another issue covered in the meeting was the project to streamline income tax. Read More.

Federal Banking Agencies Release Two Final Rules

Adopted by the Federal Reserve Board, Federal Deposit Insurance Corporation (“FDIC”) and Office of the Comptroller of the Currency (“OCC”), two recently issued final rules will strengthen the liquidity positions of large financial institutions, improve the liquidity risk profile of international banking organizations, and enhance the measurement and management of liquidity risk. Issued on September 3rd, the final liquidity coverage ratio rule (LCR) implements a quantitative liquidity requirement consistent with the LCR established by the Basel Committee on Banking Supervision and with Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For the second final rule, the. Read More.

Write-Down Guidance to Stay in ASC 323-10-35-31

The Financial Accounting Standards Board (“FASB”) has opted to keep the guidance related to write-downs of equity method investments in Accounting Standards Codification (ASC) 323-10-35-31, Investments — Equity Method and Joint Ventures – Overall – Subsequent Measurement in lieu of making the previously proposed amendments to its upcoming Financial Instrument standard. In regard to the guidance, ASC 323-10-35-31 applies the concept of a decrease in value that is deemed “other than temporary” for writing down equity investments believed at their historical rate. Although the write-down guidance remains intact, the issue has been met with disapproval by FASB members. Thomas Linsmeier. Read More.