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FASB to Clarify Troubled Debt Restructurings Guidance

Guidance for troubled debt restructurings under the Financial Accounting Standards Board’s (“FASB”) credit losses standard will soon receive an update. The FASB intends to clarify the recognition and measurement of troubled debt restructurings by allowing banking institutions that calculate allowances for credit losses on modified loans to select a prepayment-adjusted effective interest rate when implementing Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The clarified guidance would allow banks that calculate allowances for their credit losses on troubled debt restructurings to select a prepayment-adjusted effective interest rate when. Read More.

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FASB to Review Revenue Standard Implementation Costs

The Financial Accounting Standards Board (“FASB”) plans to examine how companies implement its revenue recognition standard when the guidance goes into effect next year. At a December 14 meeting, FASB Chairman Russell Golden stated that the board would undertake a comprehensive review of Accounting Standards Codification 606, Revenue From Contracts With Customers, to adjust its education process for future guidance, boost outreach with financial software providers, and find ways that could reduce implementation costs of significant standards. Golden said the review would focus on companies that have already implemented revenue. In particular, the FASB wants to know what were the. Read More.

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Data Collection Stifling Companies’ Lease Implementation Efforts

Officials from Avis Budget Group Inc. and General Dynamics Mission Systems say collecting data during the implementation process for the Financial Accounting Standards Board’s (“FASB”) leases standard has slowed compliance efforts. At a December 6 conference in Washington, D.C., company officials described their adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842), as being more intensive than expected. The FASB issued the standard to simplify lease accounting for companies. However, since corporations lease a wide range of items, the assets could produce a massive amount of data to gather and review. Adena Lerner of General Dynamics Missions Systems, for. Read More.

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FASB Standard Addresses New SEC Guidance

A new Accounting Standards Update (“ASU”) features amendments to select Securities and Exchange Commission (“SEC”) paragraphs under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”). Issued as ASU No. 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606), the standard amends the Accounting Standards Codification to incorporate the following SEC guidance: SEC Staff Accounting Bulletin (“SAB”) No. 116: SAB No. 116 aligns current SEC staff guidance with ASC Topic 606, Revenue from Contracts with Customers. This bulletin updated SAB Topic 13, Revenue Recognition, SAB Topic 8, Retail Companies,. Read More.

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Small Business Committee Wants Goodwill Accounting Changes

The Financial Accounting Standards Board’s (“FASB”) Small Business Advisory Committee is pushing for additional changes to the standard setter’s guidance for acquired goodwill. At a meeting last week, committee members said they want the FASB to provide the same simplified accounting approach to goodwill that private companies receive. Over the years, Topic 350, Intangibles — Goodwill and Other, has caused headaches among many financial professionals. Public companies must conduct an impairment test at least once a year to check for declines in goodwill value. If a value drop occurs, companies are required to take an impairment charge that usually indicates overpayment. Read More.

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FinREC Proposes Industry-Specific Implementation Guidance for Revenue Standard

Five working drafts have been issued to help several industries implement Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board. The working drafts were published earlier this month and are as follows: Healthcare Industry: Health Care Entities Revenue Recognition Implementation Issue #8-10: Performance Obligations Telecommunications Industry: Telecommunications Revenue Recognition Implementation Issue #15-6: Impact of Enforceable Rights and Obligations on Contract Term Nonprofits Industry: Not-for-Profit Revenue Recognition Implementation Issue #11-5: Not-for-Profit Subscriptions and Membership Dues Time-Share Industry: Time-Share Revenue Recognition Implementation Issue #16-8: Allocating the Transaction Price & Transfer of Control and Time-Share Revenue Recognition Implementation Issue #16-10: Contract Costs Produced by the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”), the proposed guidance will become part of the next version of the Audit and Accounting Guide: Revenue Recognition. Comments on the working drafts are due February 1, 2018.

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