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 Makes Decisions on Conceptual Framework and Codification Projects
At its August 30 board meeting, the Financial Accounting Standards Board (“FASB”) reached decisions on two ongoing projects. The first project covered was the conceptual framework project, in which the FASB agreed to remove the terms “probable”, “future economic benefits”, “sacrifices of economic benefits”, and “past transactions or events” from its revised definitions of an asset and a liability. Staff members were ordered to continue reviewing whether “control” is needed in the FASB’s definition of an asset. The FASB then discussed its project to improve the Accounting Standards Codification (“Codification”). Talks involved a staff analysis of the proposed changes and. Read More.
FASB Grant Accounting Proposal Issued
The Financial Accounting Standards Board (“FASB”) is proposing new guidance for contributions made or received by organizations, especially nonprofits. The proposed Accounting Standards Update (“ASU”) will help decide whether an organization’s transactions are treated as either a contribution or an exchange. This would be achieved by clarifying guidance on assessing whether a resource provider receives value in exchange for the transferred resources. The proposal also provides an improved framework that helps organizations decide whether a contribution is conditional or unconditional. In addition, the proposed amendments help distinguish between a donor-imposed condition and a donor-imposed restriction. Transfers of assets from a. Read More.
Outgoing FASB Member Reflects on Tenure
As his tenure on the Financial Accounting Standards Board (“FASB”) winds down, Lawrence Smith is looking back on the accomplishments he helped the board achieve. In a letter on the FASB website, Smith highlights efforts of the past 15 years (10 on the board, 5 as staff member) such as the Accounting Standards Codification, the elimination of qualifying special purpose entities, and the new leases standard. Smith also discusses some of his regrets while with the FASB, and recommends future efforts the board should undertake. Smith’s full letter can be viewed on FASB.org.
FASB Amends Guidance for Reporting Pension Costs
Later this year, some companies will be required to change the way they present expenses related to retirement benefits. The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which is intended to improve the presentation of pension costs. The amended guidance requires companies to report expenses for employees’ pensions under the same line as other compensation costs. The other pension-related expenses mentioned in FASB ASC 715-30-35-04, Compensation—Retirement Benefits — Defined Benefit Plans — Pension — Subsequent Measurement . Read More.
Topics: Accounting Standards Codification, Accounting Standards Update, Compensation—Retirement Benefits (Topic 715), Defined Benefit Plans, FASB, Financial Accounting Standards Board "FASB", Interest Costs, Net Periodic Pension Costs, Statement of Financial Accounting Standards
FASB Makes Technical Corrections to Accounting Guidance
Amendments to key parts of U.S. GAAP were announced this week by the Financial Accounting Standards Board (“FASB”). Issued as Accounting Standards Update (“ASU”) No. 2016-19, Technical Corrections and Improvements, the amendments relate to several topics in the FASB Accounting Standards Codification. FASB Chairman Russell Golden says the changes are narrow in scope and should be easy for reporting entities to understand and implement. The following amendments in ASU No. 2016-19 impact all reporting entities: Subtopic 715-30, Compensation—Retirement Benefits—Defined Benefit Plans—Pension, and Subtopic 715-60, Compensation—Retirement Benefits—Defined Benefit Plans—Other Postretirement, and Topic 944, Financial Services—Insurance. ASU No. 2016-19 advises uniform use. Read More.
Topics: Accounting Standards Codification, Debt Restructuring, Defined Benefit Plans, Fair Value Measurement (Topic 820), FASB Technical Corrections, Financial Accounting Standards Board "FASB", Financial Instruments (Topic 825), Goodwill, Insurance (Topic 944), Intangibles, Liability Arrangements, Not-for-Profit Entities (Topic 958), Other Postretirement Employee Benefit Plans, Real Estate, Transfers & Servicing