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Financial Services

FASB Deems Regulatory Guidance from Financial Services Standard Irrelevant

The Financial Accounting Standards Board (“FASB”) has published a small U.S. GAAP update that removes decades-old bank regulatory guidance from its financial services standard. Accounting Standards Update No. 2018-06, Codification Improvements to Topic 942: Financial Services—Depository and Lending, eliminates a reference to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges, from FASB Accounting Standards Codification 942-740-45-1, Financial Services—Depository and Lending—Income Taxes — Other Presentation Matters — Differences Between Regulatory Accounting Principles and GAAP. Published in 1985, the guidance has since been rescinded. Per the FASB, the Codification guidance related to the. Read More.

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Amended Capital Rule for FASB Credit Loss Standard Proposed

The Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation have proposed amending regulatory capital rules to improve consistency among bank regulation and the Financial Accounting Standards Board’s credit loss standard. Issued as Regulatory Capital Rules: Implementation and Transition of the Current Expected Credit Losses Methodology for Allowances and Related Adjustments to the Regulatory Capital Rules and Conforming Amendments to Other Regulations, the proposal would give banks the choice to phase-in the capital impacts of implementing Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial. Read More.

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GAO Asks Regulators to Increase Fintech Protections

The Government Accountability Office (“GAO”) wants securities regulators to step up their efforts in safeguarding investors and consumers from financial technology (“fintech”) products. In its March 22 report, the GAO said fintech products present the same risks as traditional products, but current laws and regulations may not sufficiently address such risks. How much fintech firms must comply with applicable federal laws differs. Regulators like the Securities and Exchange Commission (“SEC”) can supervise fintech investment advisors just as they do traditional advisors, but the GAO said that digital assets could create unique risks to investors. The SEC, however, believes digital assets. Read More.

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FASB to Curtail Fair Value Disclosure Requirements

The Financial Accounting Standards Board (“FASB”) has finalized amendments that would prevent companies from disclosing irrelevant and unnecessary information on financial statement footnotes related to how they measure the fair value of select assets and liabilities. Decided at the FASB’s March 7 meeting, the amendments will be based on Proposed Accounting Standards Update No. 2015-350, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The FASB believes the changes will lower costs for companies and improve disclosures for investors and analysts. Companies will have to adopt the amended disclosure requirements for fiscal. Read More.

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Smaller Banks Can Avoid Using Complex Models in Calculating Loss Reserves

Community bankers could be exempt from using the complex models necessary to comply with the Financial Accounting Standards Board’s (“FASB”) credit loss standard. Banking regulators said that the current expected credit loss model under Accounting Standards Update (ASU) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, is flexible enough that smaller lending institutions are not required to purchase expensive software or use complex modeling techniques to meet the standard’s provisions for calculating loss reserves. During a February 27 webcast, the Federal Reserve’s Joanne Wakim stated that small banks could calculate loss reserves. Read More.

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Phil Shechter Discusses Tax Reform with South Florida Legal Guide

In a recent interview with South Florida Legal Guide, Cherry Bekaert’s (“the Firm”) Phil Shechter, CPA, discusses the impact of the Tax Cuts and Jobs Act on both individual and business taxpayers. Shechter, the Firm’s National Leader of Litigation Support Services, provides general information on tax reform affecting individual tax rates, mortgage interest deductions, small businesses and pass-through entities. Read Phil’s full interview on the South Florida Legal Guide website. Additionally, if you seek guidance on forensic and litigation matters, Cherry Bekaert’s Forensic & Litigation Advisory Services team is ready to help.

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