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FASB Reaches Decisions on Proposed Hedge Accounting Updates

Last week while discussing its proposed Accounting Standards Update, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, the Financial Accounting Standards Board agreed to include a cross currency basis spread in a currency swap to the list of excluded amounts from hedge effectiveness assessments. In addition, the FASB agreed on using an amortization approach with respect to the base recognition model for excluded components. Companies will also be allowed to use a mark-to-market through earnings method. Further, when a hedging relationship ends and an amortization approach is applied, the fair value changes of excluded components in. Read More.

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FASB Task Force Approves Proposed Guidance on Infrastructure Deals

An update to U.S. GAAP could provide clearer guidance on certain agreements between government entities and private-sector businesses. On March 16, the Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“EITF”) unanimously approved an amendment which covers deals involving a private organization that operates public infrastructure. The operator normally pays a fee to the government, and in turn receives all, or a part of, the revenues. In some arrangements, the government entity pays the private company to operate the facility but collects a portion of the proceeds. The EITF-approved amendment is part of Proposed Accounting Standards Update No. EITF-16C. Read More.

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Dodd-Frank Whistleblower Protections Upheld

A broad interpretation of Dodd-Frank whistleblower protections was upheld this month by the Ninth Circuit Court of Appeals (“Ninth Circuit”). Earlier this month, the Ninth Circuit ruled that whistleblowers who report illegal behavior through their employer instead of the Securities and Exchange Commission (“SEC”) fall under the anti-retaliation protections. The decision was based on the case of Somers v. Digital Realty Trust, which involved the termination of Digital Realty’s former vice president being fired after reporting possible securities law violations. Paul Somers sued Digital Realty, claiming that his termination violated whistleblower protections under the Dodd-Frank Act. Digital Realty maintained that. Read More.

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FASB Consolidation Guidance Could Be Split Up

In a unanimous decision last week, Financial Accounting Standards Board (“FASB”) members agreed to propose splitting its consolidation guidance in two. The FASB wants to remove the guidance regarding voting interest entities and variable interest entities under Topic 810, Consolidation, and add it to a new standard called Topic 812. FASB members noted that the separation would make consolidation guidance easier for companies to follow and would conform to how Big Four firms produce their own manuals for accountants to consult. The March 8 decision was part of the board’s work to simplify certain aspects of Topic 810, which defines. Read More.

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AICPA Ethics Board Issues Exposure Draft on Legal Non-Compliance

The American Institute of Certified Public Accountants’ (“AICPA”) Professional Ethics Executive Committee has proposed new interpretations concerning the AICPA Code of Professional Conduct. The two proposed interpretations are part of the Exposure Draft, Responding to Non-Compliance with Laws and Regulations , and impacts members in both public practice and business. Entitled “Responding to Non-Compliance with Laws and Regulations” under the “Integrity and Objectivity Rule”, the proposed interpretations offer guidance on a member’s responsibilities when handling non-compliance with regulations at a client or in his or her employing organization. Members that encounter non-compliance must either: Allow the client’s or employing company’s oversight and those with the authority to resolve the. Read More.

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FASB Reaches Decisions on Hedge Accounting Project

During a review last week on its proposed Accounting Standards Update, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, the Financial Accounting Standards Board (“FASB”) reached conclusions on the following topics: The market yield test. The FASB decided to exclude the market yield test from the final standard. Companies would have been required to use the total contractual coupon cash flows to determine fair value of the hedge item attributable to interest rate risk, if the hedge item’s market yield is below the benchmark interest rate at hedge inception. Companies now have the freedom to use. Read More.

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