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.
Topics: Business Combinations (Topic 805), Fair Value Measurement (Topic 820), FASB, FASB Accounting Standards Codification, Financial Accounting Standards Board "FASB", Income Taxes, Proposed Accounting Standards Update, Stock Compensation (Topic 718), U.S. GAAP
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.
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.
Topics: Accounting Standards Update "ASU", Emerging Issues Task Force "EITF", FASB, lease accounting, Revenue from Contracts with Customers (Topic 606), Revenue Recognition, SEC, Securities and Exchange Commission "SEC"
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.
FASB Proposes Reorganizing Consolidation Guidance
To address concerns over the organization of the guidance under Topic 810, Consolidation, the Financial Accounting Standards Board (“FASB”) recently issued Proposed Accounting Standards Update, Consolidation (Topic 812): Reorganization. The proposal reorganizes certain components within the FASB’s consolidation guidance and includes for illustrative purposes the amendments under the Proposed Accounting Standards Update, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The FASB would reorganize the consolidation guidance under Topic 810 into a new Topic featuring the following two Subtopics for variable interest entities and voting interest entities: Subtopic 812-20, Consolidation—Variable Interest Entities Subtopic 812-30, Consolidation—Voting. Read More.
Interpretive Guidance Updated for Revenue Recognition
New interpretive guidance is available regarding revenue recognition. On August 18, the Securities and Exchange Commission (“SEC”) issued Release No. 33-10402, Commission Guidance Regarding Revenue Recognition for Bill-and-Hold Arrangements, which advises public companies to abandon the guidance for bill-and-hold transactions under Accounting and Auditing Enforcement Release (“AAER”) No. 108, In the Matter of Stewart Parness, once they start applying Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. Until then, companies should continue using guidance under AAER No. 108. Another interpretive release issued was Release No. 33-10403, Updates to Commission Guidance Regarding Accounting for. Read More.
Topics: Accounting and Auditing Enforcement Release, Accounting Standards Codification, FASB, Financial Accounting Standards Board "FASB", Revenue Recognition, SEC, Securities and Exchange Commission "SEC", Staff Accounting Bulletin "SAB"