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FASB Issues Guidance on Consolidated Collateralized Financing Entities

Issued by the Financial Accounting Standards Board (“FASB”), Accounting Standards Update (ASU) No. 2014-13, Consolidation (Topic 810): Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity, applies to any reporting entity required to consolidate a collateralized financing entity under the Variable Interest Entities guidance when: (1) the reporting entity measures all of the financial assets and the financial liabilities of that consolidated collateralized financing entity at fair value in the consolidated financial statements; and (2) the changes in the fair values of those financial assets and financial liabilities are reflected in earnings. As defined under. Read More.

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Standard Setters Still at Odds over Lease Project

At their July 23rd joint meeting, the Financial Accounting Standards Board (“FASB”) and International Accounting Standards Board (“IASB”) resumed efforts to converge U.S. GAAP and IFRS. In particular, the top focus was FASB’s Proposed Accounting Standards Update (ASU) No. 2013-270, Leases (Topic 842), and IASB’s Exposure Draft (ED) No. 2013-6, Leases. Conflicted on recognizing the gains for sale-leaseback transactions, the boards continue to have opposing attitudes toward their lease accounting project. During the meeting, FASB agreed to allow sellers of assets to recognize the full gain from the time of the transaction. On the conflicting end, IASB agreed to let. Read More.

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FASB Backs Task Force’s Recent Meeting Decisions

Reflecting decisions from its Emerging Issues Task Force’s June meeting, the Financial Accounting Standards Board (“FASB”) approved two Accounting Standards Updates. Per its meeting yesterday, the FASB will release Issue No. 12-G, “Measuring the Financial Assets and Financial Liabilities of a Consolidated Collateralized Financing Entity”, and Issue No. 13-F, “Accounting for the Effect of a Federal Housing Administration Guarantee.”

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FASB Continues U.S. GAAP Simplification Initiative

Hoping to streamline inventory measurement and remove the requirements for extraordinary items, the Financial Accounting Standards Board recently released two proposed Accounting Standards Updates. The proposals, which are part of FASB’s efforts to simplify U.S. GAAP , include: — Inventory (Topic 330): Simplifying the Measurement of Inventory. This proposal is in response to stakeholder concerns about the current guidance on measuring inventory. Currently, reporting entities are required to measure inventory at the lower of cost or market. The new guidance would require inventory to be measured at the lower of cost and net realizable value. Thus, it would eliminate existing requirements to consider the replacement cost. Read More.

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AICPA Releases Updates to AAG Standards and Audit Risk Alert

Published on June 26th, the American Institute of Certified Public Accountants (“AICPA”) issued updates to five Audit and Accounting Guides (“AAG”). The AAG updates include the following: Compilation and Review Engagements now offers interpretive guidance on recent adjustments to the Statements on Standards for Accounting and Review Services for compilation and review engagements. The Construction Contractors update includes simplified versions of the Auditing Standards Board’s audit standards and Professional Ethics Executive Committee’s Ethics Code of Professional Conduct. Investment Companies reflects modifications to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (ASU) No. 2013-08, Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements, the. Read More.

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ASU Related to Performance Targets Issued by the FASB

Due to an agreement regarding its Emerging Issues Task Force, the Financial Accounting Standards Board has released Accounting Standards Update (ASU) No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. Effective for annual and interim periods within periods starting after December 15, 2015, the ASU’s amendments require a performance target that impacts vesting and can be attained after the requisite service period be handled as a performance condition. When calculating the award’s grant-date fair value, the performance target should not be considered. The compensation. Read More.

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