SEC Lightens Disclosure Requirements for Public Companies
As part of its Disclosure Simplification initiative, the Securities and Exchange Commission (“SEC”) has published a rule to reduce a public company’s disclosure requirements. Issued as Release No. 33-10532, Disclosure Update and Simplification, the final amendments will help public companies with their regulatory reporting without denying investors of information beneficial to their investment-making decisions. The changes aim to implement the provisions under Section 72002(2) of the Fixing America’s Surface Transportation Act and mostly follow the proposed versions published under Release No. 33-10110, Disclosure Update and Simplification. The changes will be effective 30 days after their publication in the Federal Register. Meanwhile, the. Read More.
FASB Releases Updated Guidance on Long-Term Insurance Policies
The Financial Accounting Standards Board’s (“FASB”) latest amendments impact companies that sell long-term insurance products such as life and disability insurance. Accounting Standards Update (“ASU”) No. 2018-12 – Financial Services —Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, changes how insurers and underwriters assess liabilities for long-term policies. Underwriters are now required to frequently update their assumptions to estimate payouts to customers and apply a standardized discount rate to calculate liabilities. When underwriting a customer’s policy, insurers previously had to lock in assumptions regarding a customer’s life expectancy or missed payments. The guidance meant liability estimates for long-term. Read More.
Resolution Aims to Ban Representatives from Public Company Boards
After Rep. Chris Collins (R-N.Y.) was indicted for insider trading, Reps. Kathleen Rice (D-N.Y.) and Tom Reed (R-N.Y.) plan to introduce a resolution that would bar members of the House of Representatives from serving on public company boards. The resolution would reflect similar injunctions in the Senate, which prohibits senators from sitting as an officer or board member for any publicly-held or regulated business entity. Reps. Rice and Reed said the rules must be changed to improve the public’s trust in Congress, and that the American people are owed fair assurance. Rep. Collins was charged on August 8 for allegedly. Read More.
PCAOB Seeks Feedback on Draft Strategic Plan
For the first time ever, the Public Company Accounting Oversight Board (“PCAOB”) is seeking public comments on the draft version of its strategic plan. The draft of Strategic Plan: 2018-2022 outlines the PCAOB’s long-term objectives for improving audit quality and the board’s efforts to improve its communication to financial markets and the accounting field. The PCAOB’s draft plan includes providing accounting firms more timely responses following inspections and giving quick feedback to auditing profession and financial reporting changes. Additionally, the audit regulator wants its enforcement efforts to focus on issues that are of greater risk to investors and will discourage. Read More.
FASB Wants Public Companies for Segment Reporting Study
Marking the first phase of its segment reporting outreach, the Financial Accounting Standards Board (“FASB”) is requesting that public companies participate in a study to improve U.S. GAAP guidance regarding the aggregation of operating segments and the reportable segments method. Specifically, the FASB wants public companies to share how they apply the criteria under FASB Accounting Standards Codification (“ASC”) 280, Segment Reporting, and how two alternatives would impact how their financial statements are presented. One alternative involves reorganizing the process for deciding which operating segments are reported and moving the quantitative thresholds for reportable segments to an earlier stage of. Read More.
FASB to Clarify Collaborative Arrangements Guidance
Pharmaceutical and biotechnology companies that set up joint ventures to develop drugs will receive new accounting guidance soon. In a unanimous decision on July 26, the Financial Accounting Standards Board (“FASB”) agreed to finalize a small change to U.S. GAAP that would help companies account for transactions in collaborative arrangements as revenue. The FASB hopes the update will help companies follow the revenue guidance under Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. Likely to be issued before year’s end, the update will reflect guidance under Proposed Accounting Standards Update (“ASU”) No. 2018-240, Collaborative Arrangements (Topic 808): Targeted Improvement. The. Read More.