FASB Reconfirms Lease Standard’s Effective Date
While some companies continue to struggle with the implementation of Accounting Standards Update No. 2016-02, Leases (Topic 842), the Financial Accounting Standards Board (“FASB”) has no plans to postpone the standard’s 2019 effective date for public businesses. On August 29, an FASB spokesperson said that the board would not consider a request to give companies more time to comply with the lease accounting standard. The spokesperson also remarked that there are no plans to delay the standard’s effective date. As mentioned in our August 11 blog , the American Petroleum Institute (“API”) asked the FASB to delay the standard by two years. The. Read More.
FASB Finalizes Updated Hedge Accounting Guidance
Announced on Monday, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) that improves the guidance related to hedge accounting. ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, aligns the accounting provisions with an entity’s risk management activities, as well as reflects the economic impact of hedging in financial statements, and streamlines hedge accounting treatment. In addition, the new standard expands hedge accounting for financial and commodity risks. The requirements provide additional clarity regarding how economic results are disclosed in financial statements. ASU No. 2017-12 will be effective for public. Read More.
Financial Accounting Foundation Seeks New FASAC Members
New members are requested for the Financial Accounting Standards Board’s (“FASB”) main advisory panel. The Financial Accounting Foundation is currently seeking candidates to join the Financial Accounting Standards Advisory Council (“FASAC”), a 35-member group that offers feedback on the FASB’s standard-setting projects and its priorities. The Financial Accounting Foundation wants nominees from private and public companies with a background in the financial services, retail, manufacturing, transportation, health care, agriculture, or service sector. Investors, such as securities analysts and hedge fund or private equity managers, and investment bankers, are also encouraged. Selected members will serve four one-year terms with the FASAC.. Read More.
FASB to Address Troubled Debt Restructurings for Credit Loss Standard
Happening early next month is a discussion on the Financial Accounting Standards Board’s (“FASB”) new banking requirements for calculating losses on bad loans. The discussion on Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, is expected to clarify how banks and auditors should account for troubled debt restructurings. At the heart of ASU No. 2016-13, which is considered the FASB’s main response to the 2008 financial crisis, is estimating credit losses. One interpretation of the standard suggests troubled debt restructurings to be assessed on a portfolio basis, but. Read More.
SEC Advisor Speaks on Materiality and Auditor’s Report
At a recent speech for management accountants at a conference in Tulsa, OK, Stephen Deane discussed mini-case studies on policymaking associated with materiality and the independent auditor’s report. Deane, an investment engagement advisor in the Securities and Exchange Commission’s (“SEC”) Office of the Investor Advocate, said that the mini-case studies offer insight into the policymaking process and the problems that policymakers face. The mini-case studies also distinguish between outside investors and managers inside the company. During his speech, Deane provided attendees a technical review of the Financial Accounting Standards Board’s attempts to establish materiality guidance and the Public Company Accounting. Read More.
Topics: Auditor's Report, FASB, Financial Accounting Standards Board "FASB", materiality, PCAOB, Public Company Accounting Oversight Board "PCAOB", SEC's Office of the Investor Advocate, Securities and Exchange Commission "SEC"
FASB Seeks to Align Accounting Guidance Between Asset Acquisition and Business Combinations
There’s an effort underway by the Financial Accounting Standards Board (“FASB”) to look at closing the gap between the accounting standards for business combinations and the accounting standards for acquisition accounting. Because these two sets of accounting guidance are different, businesses are sometimes motivated to structure merger and acquisition (“M&A”) deals in ways that avoid complex accounting. Decreasing the differences between these standards could help make M&A activity more straightforward in the future. This effort is also a continuation of the FASB’s work to more clearly define what a business is for U.S. generally accepted accounting principles (“GAAP”). Some critics. Read More.