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Employee Benefit Plans Excluded from Disclosure Framework

As the Financial Accounting Standards Board (“FASB”) moves forward with finalizing its disclosure framework, the board has decided to exclude employee benefit plans from the guidance. Agreed upon at its October 4 meeting, the FASB said confirmed that employee benefit plans will not be evaluated similarly as other entities when the board decides whether they are required to disclose certain information. The decision was based on the FASB’s belief that an employee benefit plan’s financial statements and its users are significantly different from organizations to allow for possibly different reporting considerations. While most FASB members agreed with this sentiment, Christine. Read More.

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FASB to Clarify Guidance for Collaborative Arrangements

The Financial Accounting Standards Board (“FASB”) will seek ways to make its guidance under Topic 808, Collaborative Arrangements, easier to follow. At its October 4 meeting, the FASB unanimously agreed to simplify the guidance to reflect the board’s initial goal of clarifying when partners in a collaborative arrangement must record revenue due to the venture’s cost reductions. The FASB also plans to examine the guidance for transactions that do not generate revenue for the partners, as well as consider guidance for what is the unit of accounting under Topic 808. FASB members and staffers said that the board will not. Read More.

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FASB Working to Fix Inconsistencies of U.S. GAAP

The Financial Accounting Standards Board (“FASB”) has released a proposed Accounting Standards Update to eliminate inconsistencies in parts of the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Impacting various areas in the FASB Accounting Standards Codification, the proposed changes will apply to all reporting entities within the scope of the related accounting guidance.  Some of the amendments under Proposed Accounting Standards Update No. 2017-320 Codification Improvements, impact: Subtopic 718-740, Compensation—Stock Compensation—Income Taxes: The FASB proposes clarifying that an entity must disclose excess tax benefits (or tax deficiencies) in the reporting period when the tax deduction for compensation expense is taken on its. Read More.

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REITs Want Clarity on Reporting Maintenance Fees from Tenants

Several office real estate investment trusts (“REITs”) are asking the Financial Accounting Standards Board (“FASB”) to reconsider its lease standard’s reporting requirement concerning maintenance fees that are calculated into a tenant’s rent. In a September 28 letter to the FASB, the REITs responded to the requirement under Accounting Standards Update No. 2016-02, Leases (Topic 842), which would make landlords account for service and maintenance fees separately from the real estate rental. REITs argued that separately accounting for such fees provides minimal benefit to investors and analysts. Kilroy Realty Corp Senior Vice President Merryl Werber highlighted the issue by saying there. Read More.

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Accounting Standards Codification Updated for Revenue Recognition and Leases Standards

The Financial Accounting Standards Board has issued Accounting Standards Update (“ASU”) No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments. This Update adds, amends, and replaces Securities and Exchange Commission (“SEC”) paragraphs of the Accounting Standards Codification (“ASC”) concerning the adoption and transition rules of ASU No. 2014-09, Revenue from Contracts with Customers and ASU No. 2016-02, Leases, for public companies. ASU No.. Read More.

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Revenue Standard Could Have Major Impact on Software Industry

With the Financial Accounting Standards Board’s (“FASB”) new revenue recognition rules becoming effective in three months, the Accounting Standards Update (“ASU”) could have a major effect on the bottom lines of companies in the software industry. Under ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), software companies will have to recognize more revenue when the sale occurs. However, companies in the software industry have long-term arrangements with customers, meaning revenue is usually recognized over the life of the contract. One software company already feeling the impact is Microsoft, which was an early adopter of the standard. Under the. Read More.

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