AICPA Committees to Explore Guidance for Digital Currencies
Following similar efforts by the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”), the American Institute of Certified Public Accountants’ (“AICPA”) Auditing Standards Board and Financial Reporting Executive Committee are considering whether to issue accounting and auditing guidance on digital currencies and initial coin offerings. Both committees plan to research the matter and will likely compose a list of financial reporting questions that have appeared concerning digital transactions. Dan Noll, the AICPA director of accounting standards, said the AICPA is considering guidance on digital currencies due to the pervasive nature of the questions being asked on. Read More.
AICPA Issues Working Draft on Multiemployer Benefit Plans
The American Institute of Certified Public Accountants (“AICPA”) wants to add a chapter on multiemployer benefit plans to the Audit and Accounting Guide Employee Benefit Plans. Issued on September 7 as a working draft, the chapter follows Financial Accounting Standards Board (“FASB”) guidance related to multiemployer plans. Such guidance includes FASB ASC 960, Plan Accounting—Defined Benefit Pension Plans, and FASB ASC 960, Plan Accounting—Defined Contribution Pension Plans. Outlined in the draft chapter are the multiemployer plan requirements and how those plans vary from other employee plans. The guidance touches on the overlap among the accounting provisions of multiemployer plans and other retirement. Read More.
SOFR Interest Rate for Hedge Accounting Due By End of the Year
The Financial Accounting Standards Board (“FASB”) plans to publish a U.S. GAAP update that adds a new benchmark interest rate for hedge accounting. Set to be released by year’s end, the planned update will use the Secured Overnight Financing Rate (“SOFR”) as a benchmark rate for labeling hedges of interest rate risk. If the update is finalized, the SOFR will be added to Topic 815, Derivatives and Hedging. Introduced by the Federal Reserve earlier this year to replace the controversial London Interbank Offered Rate (“LIBOR”), the SOFR is founded on the interest rates banks charge each other in the overnight. Read More.
FASB Publishes Two Standards to Streamline Company Disclosures
For years, companies have asked the Financial Accounting Standards Board (“FASB”) to improve its guidance on fair value measurement and pension disclosures. Their requests were finally granted last week in the form of two Accounting Standards Updates (“ASU”): ASU No. 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, aims to remove irrelevant disclosures concerning methods for assessing the fair value of certain assets and liabilities as stated under FASB ASC 820, Fair Value Measurement. The standard divides fair value measurements into a three-tier fair value hierarchy conditional on the reasoning used in the measurement.. Read More.
FASB Issues Update to its Conceptual Framework
The Financial Accounting Standards Board (“FASB”) continues to advance efforts to write consistent and effective disclosure rules in its standards. On August 28, the board published Concepts Statement (“CON”) No. 8, Conceptual Framework for Financial Reporting: Notes to the Financial Statements, which the FASB will use as a guide clarifying what information to consider when developing new disclosure requirements for future Accounting Standards Updates. Known as the “disclosure framework,” CON No. 8 will attempt to resolve a years-long debate over how much information should the board require from companies without them overloading financial statement footnotes with irrelevant details. The framework explains why. Read More.
FASB Issues Proposed Changes to Lease Accounting Standard
A recently proposed update to the Financial Accounting Standards Board’s (“FASB”) lease accounting standard aims to alleviate the work lessors will have to perform when applying Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). Proposed ASU No. 2018-260, Leases (Topic 842): Narrow-Scope Improvements for Lessors, offers lessors new guidance on the breakout of sales and other similar taxes from their costs, and the recognition of certain expenses and variable payments for lease and non-lease portions of a contract. Landlords and companies that lease equipment to their customers informed the FASB that the amount of work and analysis required by ASU No.. Read More.