New Cash Flow Statement Classification Guidance Issued
The Financial Accounting Standards Board has issued new guidance to address how specific cash receipts and payments are classified in cash flow statements. The amendments in Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, cover the following cash flow issues: Debt prepayment or debt extinguishment costs Settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant concerning the effective interest rate of the borrowing Contingent consideration payments made following a business combination Proceeds from the settlement of insurance claims Proceeds from the settlement. Read More.
Topics: Business Combination, Debt Extinguishment Costs, Debt Prepayment, Equity method accounting, FASB, Insurance Claims, Securitization Transactions, Statement of Cash Flows (Topic 230), Zero-Coupon Debt Instruments
Proposed Changes to Cash Flow Presentation Issued
The proposed Accounting Standards Update, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, was recently issued by the Financial Accounting Standards Board. Seeking to reduce the current diversity in practice in the presentation and classification of certain cash receipts and cash payments under Topic 230 and other Topics, the proposal addresses the following cash flow issues: Debt Prepayment or Debt Extinguishment Costs Settlement of Zero-Coupon Bonds Contingent Consideration Payments Made after a Business Combination Proceeds from the Settlement of Insurance Claims Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance. Read More.
Accounting for PCC Issue on Identifiable Intangible Assets Finalized
Announced by the Private Company Council (“PCC”), the accounting for identifiable intangible assets in PCC Issue No. 13-01A, “Accounting for Identifiable Intangible Assets in a Business Combination” has been finalized. In preparation for endorsement by the Financial Accounting Standards Board (“FASB”), a final Accounting Standards Update (ASU) is being prepared. The ASU will feature amendments stating an entity would not identify non-competition agreements, and customer-related intangible assets not able to be sold or licensed separately from other assets in a business combination. Once endorsed, the amendments would go into effect for business combinations agreed upon in the first annual period. Read More.
FASB Task Force Meeting to Vote on U.S. GAAP Amendments
When the Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“the Task Force”; “EITF”) meets next week, the group plans to vote on two proposed amendments to U.S. GAAP. The amendments to be voted on are: Proposed Accounting Standards Update (ASU) No. EITF-13G, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force); and Proposed ASU No. EITF-12F, Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging. Read More.
PCC Orders FASB to Conduct Further Pre-Agenda Research
After reviewing various projects the Financial Accounting Standards Board’s (“FASB”) has been working on, the Private Company Council (“PCC”) recently ordered the FASB staff to perform additional research to be discussed at a later meeting. At its Tuesday meeting, the PCC continued talks on an alternative accounting for recognizable intangible assets in a business combination however, no decisions were made. In addition, the group discussed the accounting for certain partnership transactions, and shared stakeholder involvement with the FASB regarding stock-based compensation. Other topics covered from the meeting included FASB’s financial instruments impairment accounting efforts, Emerging Issues Task Force Issue No.. Read More.