Limited Proposal Coming for Payments in Collaborative Arrangements
The Financial Accounting Standards Board (“FASB”) plans to issue for public comment a limited proposal that clarifies when to account for payments in collaborative arrangements as revenue. The proposed amendment to Topic 808, Collaborative Arrangements, would state that certain transactions between collaborative partners that are separate from third-party sales can create revenue that is accounted for consistent with Topic 606, Revenue From Contracts With Customers. FASB members unanimously approved releasing the proposal after reviewing feedback from its December workshops with auditors and companies. Members rejected calls for more specific guidance, stating that it would be tough to establish such guidance for. Read More.
FASB Finalizes Standard Related to Tax Reform
The Financial Accounting Standards Board (“FASB”) has issued an Accounting Standards Update (“ASU”) concerning certain stranded income tax effects in accumulated other comprehensive income caused by the Tax Cuts and Jobs Act. ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, gives financial statement preparers the option to reclassify stranded tax effects in accumulated other comprehensive income to retained earnings in every period wherein the impact of the new corporate income tax rate in the new tax law (or portion thereof) is recognized. As a result of the new guidance,. Read More.
Topics: Accounting Standards Update "ASU", Accumulated Other Comprehensive Income, Comprehensive Income (Topic 220), FASB, Financial Accounting Standards Board "FASB", Stranded Income Tax Effects, Tax Cuts and Jobs Act, Tax Reform
Simplified Transition to Lease Standard Offered for Land Easements
Thanks to the Financial Accounting Standards Board’s (“FASB”) latest Accounting Standards Update (“ASU”), companies with land easements contracts should have an easier time applying the board’s lease standard. ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, offers a simplified transition to ASU No. 2016-02, Leases (Topic 842), for businesses with the right to use another entity’s land for purposes such as running pipelines or burying transmission wires. The amendments ensure that businesses can successfully transition to ASU No. 2016-02 without impacting the information investors receive about land easements. The FASB addresses the issue. Read More.
FinREC Releases Working Drafts for Implementing Revenue Standard
Last week, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) issued industry-specific working drafts featuring proposed guidance for implementing Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board (“FASB”). The working drafts, which could be added to Audit and Accounting Guide: Revenue Recognition, are as follows: Aerospace and Defense Revenue Recognition Implementation Issue # 1-5: Transfer of Control on Non-US Federal Government Contracts — Clarification on Whether a Contract Priced at a Loss Could Qualify for Over Time Recognition in Accordance with FASB ASC 606-10-25-27(c): This proposal clarifies FinREC. Read More.
Topics: Accounting Standards Update "ASU", Aerospace, Audit and Accounting Guide: Revenue Recognition, FASB, Financial Reporting Executive Committee "FinREC", FinREC, Gaming, Health Care, insurance, Revenue From Contracts With Customers, Revenue Recognition, Telecommunications
FASB Receives Support for Proposed Tax Reform Guidance
Numerous banking institutions, insurers, and financial trade organizations support the Financial Accounting Standards Board’s (“FASB”) proposed response to the Tax Cuts and Jobs Act. In comment letters on Proposed Accounting Standards Update (“ASU”) No. 2018-210, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income, groups like the American Bankers Association urged the FASB to approve its proposed amendment. Proposed ASU No. 2018-210 aims to reduce the accounting effects of complying with the new tax law and simplify financial statements for investors. The FASB released the proposal after banks and insurance companies raised concerns over certain requirements introduced by the Tax Cuts and Jobs Act. Under. Read More.
Topics: corporate income tax rate, Deferred Taxes, FASB, Financial Accounting Standards Board "FASB", Other Comprehensive Income, Proposed Accounting Standards Update, Tax Cuts and Jobs Act, Tax Reform
Private Company Advocacy Group Seeks Additional Revenue Standard Guidance
As private companies prepare to comply next year with the Financial Accounting Standards Board’s (“FASB”) revenue recognition standard, the American Institute of Certified Public Accountants’ Private Companies Practice Section (“PCPS”) seeks relief from the accounting changes. In its January 17 letter to the FASB, the PCPS requested permission for private companies to use less constricting interpretations for certain aspects of FASB Accounting Standards Codification 606, Revenue From Contracts With Customers. The PCPS believes the FASB’s landmark standard impacts private companies by requiring strong consideration of recognition and measurement disparities and disclosure differences for specific conduit debt obligors. Accordingly, the PCPS. Read More.