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FASB Issues Update to its Conceptual Framework

The Financial Accounting Standards Board (“FASB”) continues to advance efforts to write consistent and effective disclosure rules in its standards. On August 28, the board published Concepts Statement (“CON”) No. 8, Conceptual Framework for Financial Reporting: Notes to the Financial Statements, which the FASB will use as a guide clarifying what information to consider when developing new disclosure requirements for future Accounting Standards Updates. Known as the “disclosure framework,” CON No. 8 will attempt to resolve a years-long debate over how much information should the board require from companies without them overloading financial statement footnotes with irrelevant details. The framework explains why. Read More.

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Proposed House Bill Asks Companies to Disclose Board Members’ Cybersecurity Expertise

A bipartisan group in the House of Representatives has proposed a bill requiring public companies to say whether their boards include members with knowledge of cybersecurity. Similar to a Senate bill debated this year, the Cybersecurity Disclosure Act directs the Securities and Exchange Commission (“SEC”) to create provisions requiring public companies to disclose in annual reports or proxy statements the details of their board members’ “expertise or experience” in cybersecurity. If a board member has no cybersecurity background, then a company would have to explain how it considers cybersecurity when selecting new directors. The SEC and the National Institute of. Read More.

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Smaller Companies Spending Less on XBRL Filings

According to a recent survey from the American Institute of Certified Public Accountants (“AICPA”), filing financial data in an interactive format has become less of a financial burden on small public companies. Last year, average eXtensible Business Reporting Language (“XBRL”) costs for smaller reporting companies were $5,476. The 2017 figure is a 45-percent drop from 2014, when average XBRL costs totaled $10,000. About 68.6 percent of the smaller reporting companies surveyed (1,032 companies) paid less than $5,500 last year for their XBRL filing. Compared to 2014, only 29.9 percent of companies spent that amount. Also last year, 581 companies spent. Read More.

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FASB Issues Proposed Changes to Lease Accounting Standard

A recently proposed update to the Financial Accounting Standards Board’s (“FASB”) lease accounting standard aims to alleviate the work lessors will have to perform when applying Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). Proposed ASU No. 2018-260, Leases (Topic 842): Narrow-Scope Improvements for Lessors, offers lessors new guidance on the breakout of sales and other similar taxes from their costs, and the recognition of certain expenses and variable payments for lease and non-lease portions of a contract. Landlords and companies that lease equipment to their customers informed the FASB that the amount of work and analysis required by ASU No.. Read More.

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More Financial Executives Worried over Implementing Leases Standard

Frustration among financial reporting executives over the Financial Accounting Standards Board’s (“FASB”) new leases guidance is rising. A recent survey on Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), revealed that 29.5 percent of executives say they are unprepared to implement the standard. The percentage is up 7.1 points (22.4 percent) from the same survey conducted in January. With the leases standard going into effect next year for public companies (2020 for private companies), several factors are being contributed to implementation concerns. For instance, most companies consider collecting and tracking information on lease agreements in a financial system a large. Read More.

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House Bill Includes Insider Trading Plan Study

News of Rep. Chris Collins’ (R-N.Y.) recent indictment for insider trading has brought attention to a little-known provision in the JOBS and Investor Confidence Act of 2018. Passing through the House of Representatives last month, the bill dubbed “JOBS Act 3.0” features a measure requiring the Securities and Exchange Commission (“SEC”) to study insider trading plans administered by Rule 10b5-1 of the Securities Exchange Act. Such plans let company insiders trade stock on a fixed schedule and avoid liability from insider trading. The study includes examining the new restrictions to Rule 10b5-1, such as when an issuer can implement a 10b5-1 plan. Currently, Rule 10b5-1 offers an organized approach. Read More.

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