FASB Task Force Approves Proposed Guidance on Infrastructure Deals
An update to U.S. GAAP could provide clearer guidance on certain agreements between government entities and private-sector businesses. On March 16, the Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“EITF”) unanimously approved an amendment which covers deals involving a private organization that operates public infrastructure. The operator normally pays a fee to the government, and in turn receives all, or a part of, the revenues. In some arrangements, the government entity pays the private company to operate the facility but collects a portion of the proceeds. The EITF-approved amendment is part of Proposed Accounting Standards Update No. EITF-16C. Read More.
Topics: Emerging Issues Task Force "EITF", FASB, Financial Accounting Standards Board "FASB", Infrastructure, Proposed Accounting Standards Update, Service Concession Arrangements (Topic 853), U.S. GAAP
How Nonprofits Can Address Revenue Recognition Issues
Some companies are beginning to implement the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard and the board’s standard on nonprofit financial reporting. For nonprofits, however, one of the main challenges they face is whether certain revenue transactions are considered contributions or exchange transactions. In addition, when reviewing transactions, what is considered a conditional contribution or an unconditional contribution? For more nonprofits and revenue recognition, visit The Journal of Accountancy. As always, Cherry Bekaert’s Nonprofits group can assist with the implementation of the FASB’s revenue recognition standard and your financial reporting needs.
FASB Consolidation Guidance Could Be Split Up
In a unanimous decision last week, Financial Accounting Standards Board (“FASB”) members agreed to propose splitting its consolidation guidance in two. The FASB wants to remove the guidance regarding voting interest entities and variable interest entities under Topic 810, Consolidation, and add it to a new standard called Topic 812. FASB members noted that the separation would make consolidation guidance easier for companies to follow and would conform to how Big Four firms produce their own manuals for accountants to consult. The March 8 decision was part of the board’s work to simplify certain aspects of Topic 810, which defines. Read More.
FASB Reaches Decisions on Hedge Accounting Project
During a review last week on its proposed Accounting Standards Update, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, the Financial Accounting Standards Board (“FASB”) reached conclusions on the following topics: The market yield test. The FASB decided to exclude the market yield test from the final standard. Companies would have been required to use the total contractual coupon cash flows to determine fair value of the hedge item attributable to interest rate risk, if the hedge item’s market yield is below the benchmark interest rate at hedge inception. Companies now have the freedom to use. Read More.
Topics: Derivatives and Hedging (Topic 815), FASB, Financial Accounting Standards Board "FASB", Hedge Accounting, Hedging, Last Layer Approach, Market Yield Test, Prepayable Assets, Proposed Accounting Standards Update
FASB Amends Guidance for Reporting Pension Costs
Later this year, some companies will be required to change the way they present expenses related to retirement benefits. The Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which is intended to improve the presentation of pension costs. The amended guidance requires companies to report expenses for employees’ pensions under the same line as other compensation costs. The other pension-related expenses mentioned in FASB ASC 715-30-35-04, Compensation—Retirement Benefits — Defined Benefit Plans — Pension — Subsequent Measurement . Read More.
Topics: Accounting Standards Codification, Accounting Standards Update, Compensation—Retirement Benefits (Topic 715), Defined Benefit Plans, FASB, Financial Accounting Standards Board "FASB", Interest Costs, Net Periodic Pension Costs, Statement of Financial Accounting Standards
FASB Addresses General Expenditure Questions for Nonprofit Standard
With the 2018 effective date approaching for Accounting Standards Update (“ASU”) No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, a project manager with the Financial Accounting Standards Board’s (“FASB”) research team has advised nonprofit groups not to overthink the concept of “general expenditure.” Addressing concerns over the disclosure of funds for general expenditure at last week’s FASB Not-for-Profit Advisory Committee meeting, Rick Cole said donor restrictions on certain funds would not be exempt from general expenditures. He remarked that many of the illustrations should be taken as they are, not as absolute law. FASB Assistant Director. Read More.
Topics: Accounting Standards Update "ASU", FASB, FASB Nonprofit Standard, FASB Not-for-Profit Advisory Committee, Financial Accounting Standards Board "FASB", Financial Statement Disclosures, Not-for-Profit Entities (Topic 958)