FASB Drops Materiality Project
After two years of controversy, the Financial Accounting Standards Board (“FASB”) is scrapping plans to continue work on its proposal to amend the definition of materiality. The project, which commenced in September 2015, set out to align U.S. GAAP’s meaning of materiality with the legal interpretation regulators and courts use so companies can carefully decide their disclosures in financial statement footnotes. Work on the materiality amendments ended Wednesday, November 8. Board members did not expect to receive criticism for Proposed Accounting Standards Update No. 2015-310, Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material. Wall Street investors led the. Read More.
Proposed Grants and Contributions Guidance Receives Support
With the comment period ending last week for Proposed Accounting Standards Update (ASU) No. 2017-270, Not-for-Profit Entities (Topic 958) Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, nonprofit and professional groups and audit firms have expressed support for the Financial Accounting Standards Board’s (“FASB”) attempts to simplify how organizations disclose revenue from grants and contributions. Mostly impacting nonprofits like charities and foundations, the proposal revises the guidance on determining whether gifts to nonprofit groups must be presented as contributions subject to ASC 958-605, Not-for-Profit Entities—Revenue Recognition, or as reciprocal transactions (i.e., exchanges) subject to ASC 605/606. The. Read More.
Topics: FASB, Financial Accounting Standards Board "FASB", Financial Reporting Executive Committee "FinREC", Grants & Contributions, Nonprofits, Not-for-Profit Entities (Topic 958), Proposed Accounting Standards Update
PCAOB Issues Guidance for Revenue Recognition Standard
After reviewing implementation of Accounting Standards Update (“ASU”) No. 2014-09, Revenue From Contracts With Customers (Topic 606), the Public Company Accounting Oversight Board (“PCAOB”) is responding with a new Staff Audit Practice Alert (“APA”) to provide auditors with interpretive guidance. Released on October 5, APA No. 15, Matters Related to Auditing Revenue From Contracts With Customers, features 20 pages of staff guidance highlighting the PCAOB’s requirements and related considerations for audits. Such considerations include confirmation of management’s transition disclosures in financial statement notes and transition adjustments. The PCAOB said that as implementation of the Financial Accounting Standards Board’s revenue standard. Read More.
Topics: Accounting Standards Update "ASU", FASB, Financial Accounting Standards Board "FASB", PCAOB, Public Company Accounting Oversight Board "PCAOB", Revenue from Contracts with Customers (Topic 606), Revenue Recognition, Staff Audit Practice Alert
AICPA Revenue Recognition Task Force Issues Exposure Drafts
In response to Financial Accounting Standards Board Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, the American Institute of Certified Public Accountants (“AICPA”) Revenue Recognition Task Force has issued the following revenue recognition exposure drafts for comment: Brokers and Dealers Issue 3-4: Underwriting Revenues Telecommunications Issue 15-8 – Determining the Transaction Price Comments on the exposure drafts are due January 2, 2018. The AICPA is seeking comment on the issues. The comment period ends January 2, 2018.
Topics: Accounting Standards Update "ASU", AICPA, AICPA Revenue Recognition Task Forces, American Institute of Certified Public Accountants "AICPA", Brokers & Dealers, FASB, Financial Accounting Standards Board "FASB", Revenue Recognition, Telecommunications
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