SEC Staff Experiences Uptick in Revenue Standard Implementation Questions
As public companies prepare to implement Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (ASC 606), they are increasingly turning to Securities and Exchange Commission (“SEC”) staff members for implementation guidance. It is being reported that submitted questions concerning the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard increased by one-third last year, largely due to public companies needing assistance with financial reporting. One question submitted to the SEC involves revenue from credit cards. A company asked for guidance on its decision to record revenue from interchange fees that a merchant’s bank pays to the cardholder’s bank. Speaking. Read More.
Topics: Accounting Standards Update "ASU", AICPA, AICPA National Conference on Banks & Savings Institutions, American Institute of Certified Public Accountants "AICPA", FASB, Financial Accounting Standards Board "FASB", Implementation, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, Securities and Exchange Commission "SEC"
Banks Express Concerns over FASB Credit Loss Standard
Banking institutions of all sizes are preparing to implement the Financial Accounting Standards Board’s (“FASB”) new standard that requires the calculation of future losses on bad loans versus disclosing losses that have already occurred. While the largest accounting update in years for banks requires an additional workload, some lenders are uncertain about how to sift through their data for estimating future losses and setting aside cash reserves. At the American Institute of Certified Public Accountants’ National Conference on Banks & Savings Institutions last week, Federal Savings Bank executive vice president and CFO James Brannen touched on the difficulties a small. Read More.
Topics: Accounting Standards Update "ASU", AICPA National Conference on Banks & Savings Institutions, Banks, FASB credit loss standard, Financial Instruments - Credit Losses (Topic 326), Securities and Exchange Commission "SEC"
FASB Reconfirms Lease Standard’s Effective Date
While some companies continue to struggle with the implementation of Accounting Standards Update No. 2016-02, Leases (Topic 842), the Financial Accounting Standards Board (“FASB”) has no plans to postpone the standard’s 2019 effective date for public businesses. On August 29, an FASB spokesperson said that the board would not consider a request to give companies more time to comply with the lease accounting standard. The spokesperson also remarked that there are no plans to delay the standard’s effective date. As mentioned in our August 11 blog , the American Petroleum Institute (“API”) asked the FASB to delay the standard by two years. The. Read More.
FASB Proposes Changes to Leases Guidance
Speaking recently on implementation of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), the Financial Accounting Standards Board (“FASB”) proposed amendments to the transition provisions under Topic 842 for specific land easements that existed prior to Topic 842’s effective date. In particular, optional transition guidance will be provided to a company regarding land easements that occurred before the Topic’s effective date, given that the company does not presently apply Topic 840 to such land easements. Companies are asked to continue applying existing accounting policies for the affected land easements. Once Topic 842 is effective, the new guidance will apply. Read More.
Survey Shows Doubts over Implementation of Lease Standard
A Big Four accounting firm survey released last week revealed that company executives are doubtful over the implementation of the Financial Accounting Standards Board’s (“FASB”) lease accounting standard. Nearly half of companies surveyed (47.1 percent) are concerned about applying the guidance under Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), before the 2019 effective date. James Barker, a senior consultation partner for lease accounting for the Big Four firm, noted that companies are working feverishly on implementing the lease accounting guidance. Companies, however, are focusing on implementing the guidance for ASU No. 2014-09, Revenue From Contracts With Customers. The. Read More.
Three Revenue Recognition Working Drafts Published
The American Institute of Certified Public Accountants’ (“AICPA”) Financial Reporting Executive Committee (“FinREC”) recently published the following working drafts featuring proposed implementation guidance for Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606): Engineering & Construction Contractors, Issue #4-4: Uninstalled Materials. This working draft covers accounting for items acquired for a construction project but are not immediately installed. Depository and Lending Institutions Revenue, Issue #5-1; Scope Issues. This working draft covers how guidance under Topic 606 is applied to credit card annual fees, deposit-related charges, and servicing and sub-servicing income. Power & Utility Entities, Issue #13-2: Requirements. Read More.
Topics: Accounting Standards Update "ASU", AICPA, AICPA Audit and Accounting Guide, Engineering and Construction Contractors, FASB, FinREC, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, Working Drafts