Debt Presentation Rules Change for Healthcare Companies
Hospitals, clinics and other healthcare organizations will calculate debt much differently under the new revenue rules put forth by the Financial Accounting Standards Board (“FASB”). Under the new rules, which public organizations have to comply with for fiscal years beginning after December 15, 2017, discounts that healthcare organizations regularly give for procedures will no longer be considered bad debt. Instead, total revenues will include an adjustment for the amount the organization doesn’t expect to collect. For example, if a hospital charges $1,000 for a procedure but agrees to take $400 for the service from an uninsured patient, under the. Read More.
AICPA Board Releases Exposure Draft for Leases Interpretation
The American Institute of Certified Public Accountants’ (“AICPA”) Professional Ethics Executive Committee (“PEEC”) has issued an exposure draft, Proposed Revisions to the AICPA Code of Professional Conduct: Leases Interpretation, which proposes updates to the independence guidance for leases under the Code of Professional Conduct. The proposed amendments relate to Accounting Standards Update No. 2016-02, Leases, which was released last year by the Financial Accounting Standards Board. Upon the standard’s release, the PEEC assumed a project to review its leases interpretation. After its review, the PEEC agreed to update the interpretation for consistency and to address situations that could threaten independence. The exposure draft offers guidance for situations wherein a covered member. Read More.
Topics: Accounting Standards Update "ASU", AICPA Code of Professional Conduct, AICPA Exposure Draft, AICPA Professional Ethics Executive Committee, FASB, Financial Accounting Standards Board "FASB", lease accounting
Companies Seek More Guidance on Adopting FASB Leases Standard
Before the year ends, the Financial Accounting Standards Board (“FASB”) intends to take another look at Accounting Standards Update No. 2016-02, Leases (Topic 842). According to FASB Chairman Russell Golden, the board will likely consider revising the method companies must use when transitioning to the new leases standard, how landlords determine common area maintenance charges in rent payments, and updates to disclosures regarding leases in foreign currency and short-term lease expense. The standard, which requires balance sheet disclosures regarding a company’s assets and liabilities related to rented property and equipment, has raised questions concerning whether companies are prepared to implement. Read More.
FASB Proposes Codification Improvements
The Proposed Accounting Standards Update, Codification Improvements, has been issued by the Financial Accounting Standards Board (“FASB”) to help improve certain aspects of U.S. GAAP. Covered in the proposal are the following: Comprehensive Income – Overall (Subtopic 220-10): The proposal clarifies that the disclosure of tax benefits concerning deductible temporary differences and carryforwards resulting from a semi-reorganization as defined under Subtopic 852-20, are not considered comprehensive income. Debt—Modifications and Extinguishments (Subtopic 470-50): The proposal clarifies that when the fair value option is selected on extinguished debt, the extinguished debt’s net carrying amount matches its fair value at the reacquisition date.. Read More.
Topics: Business Combinations (Topic 805), Debt Extinguishment, Defined Contribution Pension Plans, Fair Value Measurement (Topic 820), FASB, Financial Accounting Standards Board "FASB", Stock Compensation (Topic 718)
FASB Task Force Addresses Cloud Computing Accounting Issue
The Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“EITF”) has resolved a longstanding accounting issue concerning the costs for setting up various types of cloud-managed business services. During its October 12 meeting, the EITF affirmed that customers of cloud computing arrangements must account for them similarly to a software license for a large business application with Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software. Last week’s decision could lead to an accounting change to U.S. GAAP. If so, the final amendment will allow companies to capitalize more costs related to installing cloud services such as employee training and creating interfaces. Read More.
Topics: Cloud Computing, Cloud Computing Arrangements, Emerging Issues Task Force "EITF", FASB, Financial Accounting Standards Board "FASB", Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40), U.S. GAAP
FASB Working to Update Definitions for Revenues and Expenses
Efforts have begun to update several financial statement definitions in the Financial Accounting Standards Board’s (“FASB”) Conceptual Framework, a guide used to help the board establish consistent accounting standards. In particular, the FASB is working to revise the definitions for revenues and expenses, as both terms use similar language in their descriptions under Statements of Financial Accounting Concepts No. 6, Elements of Financial Statements: a Replacement of FASB Concepts Statement No. 3 — Incorporating an Amendment of FASB Concepts Statement No. 2. The FASB will look into defining revenues as either inflows or other improvements to assets of a company,. Read More.