FASB Finalizes Standard Related to Tax Reform
The Financial Accounting Standards Board (“FASB”) has issued an Accounting Standards Update (“ASU”) concerning certain stranded income tax effects in accumulated other comprehensive income caused by the Tax Cuts and Jobs Act. ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, gives financial statement preparers the option to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings in every period wherein the impact of the new corporate income tax rate in the new tax law (or portion thereof) is recognized. As a result of the new guidance,. Read More.
Topics: Accounting Standards Update "ASU", Accumulated Other Comprehensive Income, Comprehensive Income (Topic 220), FASB, Financial Accounting Standards Board "FASB", Stranded Income Tax Effects, Tax Cuts and Jobs Act, Tax Reform
Simplified Transition to Lease Standard Offered for Land Easements
Thanks to the Financial Accounting Standards Board’s (“FASB”) latest Accounting Standards Update (“ASU”), companies with land easements contracts should have an easier time applying the board’s lease standard. ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, offers a simplified transition to ASU No. 2016-02, Leases (Topic 842), for businesses with the right to use another entity’s land for purposes such as running pipelines or burying transmission wires. The amendments ensure that businesses can successfully transition to ASU No. 2016-02 without impacting the information investors receive about land easements. The FASB addresses the issue. Read More.
FinREC Releases Working Drafts for Implementing Revenue Standard
Last week, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) issued industry-specific working drafts featuring proposed guidance for implementing Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board (“FASB”). The working drafts, which could be added to Audit and Accounting Guide: Revenue Recognition, are as follows: Aerospace and Defense Revenue Recognition Implementation Issue # 1-5: Transfer of Control on Non-US Federal Government Contracts — Clarification on Whether a Contract Priced at a Loss Could Qualify for Over Time Recognition in Accordance with FASB ASC 606-10-25-27(c): This proposal clarifies FinREC. Read More.
Topics: Accounting Standards Update "ASU", Aerospace, Audit and Accounting Guide: Revenue Recognition, FASB, Financial Reporting Executive Committee "FinREC", FinREC, Gaming, Health Care, insurance, Revenue From Contracts With Customers, Revenue Recognition, Telecommunications
Drug Companies Want FASB to Postpone Lease Standard
Nine pharmaceutical companies seek a one-year delay in the effective date of Accounting Standards Update No. 2016-02, Leases (Topic 842). In a letter to the Financial Accounting Standards Board (“FASB”), the companies said the new guidance for embedded lease agreements creates complications in implementing the standard before the 2019 effective date for public companies. Specifically, the pharmaceutical companies face issues with meeting the lease standard’s requirement of determining the fair value of an embedded lease contract. Drug makers regularly work with third-party manufacturers to make medicine or medicine ingredients. The contract could include an implicit asset that might be identified. Read More.
FASB to Clarify Troubled Debt Restructurings Guidance
Guidance for troubled debt restructurings under the Financial Accounting Standards Board’s (“FASB”) credit losses standard will soon receive an update. The FASB intends to clarify the recognition and measurement of troubled debt restructurings by allowing banking institutions that calculate allowances for credit losses on modified loans to select a prepayment-adjusted effective interest rate when implementing Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The clarified guidance would allow banks that calculate allowances for their credit losses on troubled debt restructurings to select a prepayment-adjusted effective interest rate when. Read More.
FASB Standard Addresses New SEC Guidance
A new Accounting Standards Update (“ASU”) features amendments to select Securities and Exchange Commission (“SEC”) paragraphs under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). Issued as ASU No. 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606), the standard amends the Accounting Standards Codification to incorporate the following SEC guidance: SEC Staff Accounting Bulletin (“SAB”) No. 116: SAB No. 116 aligns current SEC staff guidance with ASC Topic 606, Revenue from Contracts with Customers. This bulletin updated SAB Topic 13, Revenue Recognition, SAB Topic 8, Retail Companies,. Read More.
Topics: Accounting Standards Codification, Accounting Standards Update "ASU", FASB, Financial Accounting Standards Board "FASB", Income Statement, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, SEC, SEC Staff Accounting Bulletin, Securities and Exchange Commission "SEC", Vaccines for Federal Government Stockpiles