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Financial Accounting Foundation 2016 Annual Report Issued

Now available for download and digital platforms is the Financial Accounting Foundation’s (“the Foundation”) 2016 Annual Report . The report highlights how last year’s standard-setting activities by the Financial Accounting Standards Board (“FASB”) and Governmental Accounting Standards Board (“GASB”) contributed to decisions made by those who rely on financial reporting. In addition, the 2016 Annual Report includes letters from FASB, GASB, and Foundation leaders, an overview of funding sources for all three organizations, and details on what the Foundation did to support standard-setting activities throughout 2016. An interactive digital version of the 2016 Annual Report includes a video for non-technical audiences entitled “The Importance of GAAP.” The tablet-friendly version also features listings of all three organizations’. Read More.

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FASB Clarifies the Customer in Service Concession Arrangements

The Financial Accounting Standards Board (“FASB”) is providing relief to companies confused about who is the customer in a service concession arrangement. Issued as Accounting Standards Update No. 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services, the new guidance states that the grantor is the customer in service concession arrangements. Public companies, in addition to nonprofits that have issued, or are a conduit bond obligor for, securities traded, listed, or quoted on an exchange or an over-the-counter market and an employee benefit plan that submits financial statements to the Securities and Exchange Commission, must apply. Read More.

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Accounting for Intangible Assets Continues to Be Major FASB Issue

Several Financial Accounting Standards Board (“FASB”) members want to proceed cautiously on overhauling the accounting for intangible assets. During the FASB’s May 11 meeting, outgoing FASB member Lawrence Smith said he is reluctant to move forward on a project without determining what problem must be solved. Fellow board member Harold Schroeder shared similar concerns, remarking that proper research must be conducted to avoid wasting time and resources. For most of the FASB’s 44-year existence, questions have mounted over accounting for intangible assets. Some of those questions involve how intangible assets should be disclosed on balance sheets, as well as how. Read More.

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Decisions Reached on Distinguishing Liabilities from Equity Project

At its May 10 meeting, the Financial Accounting Standards Board (“FASB”) reached the following decisions on its proposed Accounting Standards Update, Distinguishing Liabilities from Equity (Topic 480): I. Accounting for Certain Financial Instruments with Down Round Features, and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception: Display (Earnings Per Share). Impacting companies within the scope of Topic 260, Earnings Per Share, an earnings per share (“EPS”) numerator modification will be required to income offered to common shareholders in basic EPS for equity-classified freestanding financial instruments. Additionally,. Read More.

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FASB Clarifies Lease Accounting Guidance

In a follow-up to its November 30, 2016, meeting, the Financial Accounting Standards Board (“FASB”) staff responded to stakeholder feedback on Accounting Standards Update No. 2016-02, Leases (Topic 842). At its May 10 meeting, FASB staff answered questions concerning the following aspects of the new leases guidance: Pipeline Laterals. The FASB affirmed that the new guidance considers a pipeline lateral as an identified asset. The FASB also advised companies to base their evaluation on a pipeline lateral on whether the customer can acquire all the economic benefits from the identified asset, and is able to instruct use of that identified asset.. Read More.

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Stock Award Modifications Guidance Updated

Guidance has been issued regarding whether the terms and conditions of share-based payments require modification accounting. Last week, Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. The new ASU requires that a modification accounting be applied unless the following conditions are met: The modified award’s fair value is equal to the original award’s fair value The modified award’s vesting conditions is equal to the original award’s vesting conditions The modified award is categorized in the same way as the original award (as either an equity instrument or a liability. Read More.

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