Interpretive Guidance Updated for Revenue Recognition
New interpretive guidance is available regarding revenue recognition. On August 18, the Securities and Exchange Commission (“SEC”) issued Release No. 33-10402, Commission Guidance Regarding Revenue Recognition for Bill-and-Hold Arrangements, which advises public companies to abandon the guidance for bill-and-hold transactions under Accounting and Auditing Enforcement Release (“AAER”) No. 108, In the Matter of Stewart Parness, once they start applying Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. Until then, companies should continue using guidance under AAER No. 108. Another interpretive release issued was Release No. 33-10403, Updates to Commission Guidance Regarding Accounting for. Read More.
Topics: Accounting and Auditing Enforcement Release, Accounting Standards Codification, FASB, Financial Accounting Standards Board "FASB", Revenue Recognition, SEC, Securities and Exchange Commission "SEC", Staff Accounting Bulletin "SAB"
FASB Proposes Amendments to Financial Instruments and Leases
Last week, the Financial Accounting Standards Board (“FASB”) issued a proposed Accounting Standards Update (“ASU”), Technical Corrections and Improvements to Recently Issued Standards: I. Accounting Standards Update No. 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities and II. Accounting Standards Update No. 2016-02, Leases (Topic 842). The proposed changes address the following areas: Equity Securities without a Readily Determinable Fair Value—Discontinuation. The proposed amendment allows a company measuring an equity security using the measurement alternative to change to a fair value method in agreement with Topic 820, Fair Value Measurement. Equity Securities without a. Read More.
Topics: Equity Securities, Fair Value Measurement (Topic 820), FASB, Financial Accounting Standards Board "FASB", Financial Instruments—Overall (Subtopic 825-10), Forward Contracts, lease accounting, Proposed Accounting Standards Update, Purchased Options, Readily Determinable Fair Value
Lease Accounting Proposal to Help Companies with Land Easements
Utility and oil and gas companies could receive new guidance from the Financial Accounting Standards Board (“FASB”) to help account for land easements. In Proposed Accounting Standards Update (“ASU”) No. 2017-290, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, the FASB gives companies with land easements what it calls a transition break. The transition break allows companies to forgo reviewing dated contract files to determine whether the transactions must be identified as leases and should be accounted for under ASU No. 2016-02, Leases (Topic 842). When the lease standard goes into effect, new easements must be reviewed. Read More.
SEC’s Corp Fin Updates Compliance and Disclosure Interpretations
Staff members of the Securities and Exchange Commission’s (“SEC”) Division of Corporation Finance (“Corp Fin”) recently updated two Compliance and Disclosure Interpretations (“C&DIs”): Fixing America’s Surface Transportation (FAST) Act (Updated Question 1) ; and Securities Act Forms (New Questions 101.04 and 101.05) . Featuring the staff’s interpretations concerning SEC forms, rules and regulations, both updates relate to financial information requirements for emerging growth companies.
SEC to Offer Interpretive Guidance on Pay Ratio Disclosures
To prepare companies for complying with the pay ratio disclosure requirements early next year, the Securities and Exchange Commission (“SEC”) recently approved new interpretive guidance. The interpretive guidance outlines the market regulator’s views regarding the use of reasonable estimates, assumptions and methodologies, and statistical sampling as allowed by the pay ratio rule. In addition, the guidance clarifies that companies can use applicable existing internal records (e.g., tax or payroll records) when determining whether to include non-U.S. employees and identifying the median employee. It also offers guidance concerning when a company can use widely recognized tests in determining whether its workers. Read More.
PCC Members Want Consistency on Cloud Computing Guidance
With the Financial Accounting Standards Board (“FASB”) continuing to research ways to improve guidance for cloud computing accounting, private organizations and their accountants are pushing for a simplified approach. At a September 19 meeting, Private Company Council (“PCC”) representatives expressed to the FASB their desire for the accounting guidance for implementation costs related to setting up cloud-based business software packages to be consistent with the board’s guidance for similar software licenses. Beth van Bladel, a PCC member and director of CFO for Hire LLC, argued in favor of cloud computing being treated similarly as software licensing. van Bladel said she preferred that companies decide on how to organize the contractual agreement based on the terms and. Read More.