Recap of Private Company Council’s December Meeting
At its December 8 meeting, the Private Company Council provided feedback on the following topics: Customer’s Accounting for Implementation, Setup, and Other Upfront Costs (Implementation Costs) Incurred in a Cloud Computing Arrangement That Is Considered a Service Contract: Council members declared that implementation costs are to be capitalized in such arrangements, except fees for a cloud computing arrangement that are considered a service contract. Financial Performance Reporting: Council members examined the results of Financial Accounting Standards Board (“FASB”) staff’s research on private company financial statements, and the possible impact disaggregation of performance information may have on the private company sector.. Read More.
FASB to Clarify Troubled Debt Restructurings Guidance
Guidance for troubled debt restructurings under the Financial Accounting Standards Board’s (“FASB”) credit losses standard will soon receive an update. The FASB intends to clarify the recognition and measurement of troubled debt restructurings by allowing banking institutions that calculate allowances for credit losses on modified loans to select a prepayment-adjusted effective interest rate when implementing Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The clarified guidance would allow banks that calculate allowances for their credit losses on troubled debt restructurings to select a prepayment-adjusted effective interest rate when. Read More.
FASB to Review Revenue Standard Implementation Costs
The Financial Accounting Standards Board (“FASB”) plans to examine how companies implement its revenue recognition standard when the guidance goes into effect next year. At a December 14 meeting, FASB Chairman Russell Golden stated that the board would undertake a comprehensive review of Accounting Standards Codification 606, Revenue From Contracts With Customers, to adjust its education process for future guidance, boost outreach with financial software providers, and find ways that could reduce implementation costs of significant standards. Golden said the review would focus on companies that have already implemented revenue. In particular, the FASB wants to know what were the. Read More.
Data Collection Stifling Companies’ Lease Implementation Efforts
Officials from Avis Budget Group Inc. and General Dynamics Mission Systems say collecting data during the implementation process for the Financial Accounting Standards Board’s (“FASB”) leases standard has slowed compliance efforts. At a December 6 conference in Washington, D.C., company officials described their adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842), as being more intensive than expected. The FASB issued the standard to simplify lease accounting for companies. However, since corporations lease a wide range of items, the assets could produce a massive amount of data to gather and review. Adena Lerner of General Dynamics Missions Systems, for. Read More.
FASB Standard Addresses New SEC Guidance
A new Accounting Standards Update (“ASU”) features amendments to select Securities and Exchange Commission (“SEC”) paragraphs under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). Issued as ASU No. 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606), the standard amends the Accounting Standards Codification to incorporate the following SEC guidance: SEC Staff Accounting Bulletin (“SAB”) No. 116: SAB No. 116 aligns current SEC staff guidance with ASC Topic 606, Revenue from Contracts with Customers. This bulletin updated SAB Topic 13, Revenue Recognition, SAB Topic 8, Retail Companies,. Read More.
Topics: Accounting Standards Codification, Accounting Standards Update "ASU", FASB, Financial Accounting Standards Board "FASB", Income Statement, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, SEC, SEC Staff Accounting Bulletin, Securities and Exchange Commission "SEC", Vaccines for Federal Government Stockpiles
FASB Codification Topic on U.S. Steamship Entities Nixed
A new Accounting Standards Update (“ASU”) from the Financial Accounting Standards Board (“FASB”) removes Topic 995, U.S. Steamship Entities, from its Codification. The amendments under ASU No. 2017-15, Codification Improvements to Topic 995, U.S. Steamship Entities: Elimination of Topic 995, impact entities with unrecognized deferred taxes linked to statutory reserve deposits made on or before December 15, 1992. The FASB is eliminating the guidance due it no longer being relevant. ASU No. 2017-15 is effective for fiscal years and first interim periods starting after December 15, 2018. Entities will be allowed to adopt the amendments early, including in an interim. Read More.