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SEC Lightens Disclosure Requirements for Public Companies

As part of its Disclosure Simplification initiative, the Securities and Exchange Commission (“SEC”) has published a rule to reduce a public company’s disclosure requirements. Issued as Release No. 33-10532, Disclosure Update and Simplification, the final amendments will help public companies with their regulatory reporting without denying investors of information beneficial to their investment-making decisions. The changes aim to implement the provisions under Section 72002(2) of the Fixing America’s Surface Transportation Act and mostly follow the proposed versions published under Release No. 33-10110, Disclosure Update and Simplification. The changes will be effective 30 days after their publication in the Federal Register. Meanwhile, the. Read More.

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FASB Releases Updated Guidance on Long-Term Insurance Policies

The Financial Accounting Standards Board’s (“FASB”) latest amendments impact companies that sell long-term insurance products such as life and disability insurance. Accounting Standards Update (“ASU”) No. 2018-12 – Financial Services —Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, changes how insurers and underwriters assess liabilities for long-term policies. Underwriters are now required to frequently update their assumptions to estimate payouts to customers and apply a standardized discount rate to calculate liabilities. When underwriting a customer’s policy, insurers previously had to lock in assumptions regarding a customer’s life expectancy or missed payments. The guidance meant liability estimates for long-term. Read More.

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FASB Wants Public Companies for Segment Reporting Study

Marking the first phase of its segment reporting outreach, the Financial Accounting Standards Board (“FASB”) is requesting that public companies participate in a study to improve U.S. GAAP guidance regarding the aggregation of operating segments and the reportable segments method. Specifically, the FASB wants public companies to share how they apply the criteria under FASB Accounting Standards Codification (“ASC”) 280, Segment Reporting, and how two alternatives would impact how their financial statements are presented. One alternative involves reorganizing the process for deciding which operating segments are reported and moving the quantitative thresholds for reportable segments to an earlier stage of. Read More.

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FASB to Clarify Collaborative Arrangements Guidance

Pharmaceutical and biotechnology companies that set up joint ventures to develop drugs will receive new accounting guidance soon. In a unanimous decision on July 26, the Financial Accounting Standards Board (“FASB”) agreed to finalize a small change to U.S. GAAP that would help companies account for transactions in collaborative arrangements as revenue. The FASB hopes the update will help companies follow the revenue guidance under Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. Likely to be issued before year’s end, the update will reflect guidance under Proposed Accounting Standards Update (“ASU”) No. 2018-240, Collaborative Arrangements (Topic 808): Targeted Improvement. The. Read More.

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Banks and Trade Groups Want More Time to Implement FASB Credit Loss Standard

A few months have passed since bank regulators introduced a proposal to alleviate the regulatory capital impact of the Financial Accounting Standards Board’s (“FASB”) credit loss standard. Several banks and trade groups, however, believe more time is needed to examine the effects of Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In comment letters to regulators, individual banks and trade groups propose extending the phase-in period of the standard from three years to five years. Representatives from groups like the Independent Community Bankers of America said that the. Read More.

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FASB Issues New Amendments to Codification

The latest round of changes to the Accounting Standards Codification (“ASC”) was recently issued by the Financial Accounting Standards Board (“FASB”). Released as Accounting Standards Update (“ASU”) No. 2018-09 Codification Improvements, the amendments clarify and make limited improvements to the Codification, as well as eliminate inconsistencies. As part of its efforts to periodically update the Codification, the FASB says the amendments will make the Codification easier for users to understand. Most of the latest changes are considered minor, but some amendments such as those involving comprehensive income reporting requirements and the requirements for distinguishing between liabilities and equity may impact numerous. Read More.

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