PCC Slams Income Tax Disclosure Plan
At its December 4th meeting, the Private Company Council (“PCC”) criticized the Financial Accounting Standards Board’s (“FASB”) proposal to add effective disclosures to Accounting Standards Codification 740-10-50, Income Taxes. The plan would require additional details about income taxes to be disclosed in the footnotes of a company’s financial statements. Members of the FASB’s advisory group, however, said that the extra details would be a burden on private companies and worthless to most financial statement users. In particular, PCC members slammed the requirement for companies to disclose the reconciliation of its effective tax rate and statutory rate. While U.S. GAAP requires public companies to. Read More.
FASB Discusses Phase 1 of Nonprofit Accounting Project
On Friday, the Financial Accounting Standards Board (“FASB”) met to discuss Phase 1 of redeliberations for its proposed Accounting Standards Update (ASU), Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities. In particular, the discussion focused on the following issues: Methods of Presenting Operating Cash Flows. The FASB agreed not to require the direct method of presenting operating cash flows, but will continue to allow nonprofit entities to use the direct method or indirect method. The FASB also decided to no longer require the indirect reconciliation if a nonprofit entity uses the. Read More.
Effective Dates for Major Standards Established by FASB
Tentative effective dates have been set by the FASB for the following final Accounting Standards Updates: Leases (Topic 842) Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Leases (Topic 842) – (scheduled to be issued in the fourth quarter of 2015) The new guidance will: Be effective for public business entities for fiscal years beginning after December 15, 2018. Include interim periods. Provide a one-year delay for all other entities. Permit certain early adoption provisions. The IASB’s forthcoming leases standard is effective for annual reporting. Read More.
More Guidance Requested for FASB Revenue Standard
While traditional brick-and-mortar shops support the Financial Accounting Standards Board’s (“FASB”) proposed clarifications to its revenue recognition standard, several e-commerce and digital retailers have asked for additional guidance to determine the distribution of a sale between partners in a customer transaction. In comment letters concerning Proposed Accounting Standards Update (ASU) No. 2015-290, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), many writers asked the standard setter to refine portions of the draft guidance. Specifically, they seek clarity on the proposed “indicators” that help a business determine if it is the principal or. Read More.
FASB Divides Nonprofit Accounting Project into Two Phases
After receiving conflicting feedback on its proposal calling for changes to nonprofit accounting guidance, the Financial Accounting Standards Board (“FASB”) recently decided to split the project into two segments. The standard setter plans to focus on the parts of Proposed Accounting Standards Update (ASU) No. 2015-230, Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities, that have received general support and postpone work on some of the more contentious aspects. Over 250 comment letters were received regarding the Exposure Draft. In addition, the FASB held 10 workshops across the US as well. Read More.
EITF Consensuses and Consensuses-for-Exposure Ratified
At its meeting yesterday, the Financial Accounting Standards Board (“FASB”) ratified two Emerging Issues Task Force (“EITF”) consensuses that were previously reached at the September 18th meeting . The consensuses ratified were Issue No. 12-F, “Pushdown Accounting”, and Issue No. 13-G, “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity.” The FASB plans to release Accounting Standards Updates (ASU) for both Issue 12-F and Issue 13-G at a later date. Additionally, the FASB ratified Issue No. 14-A, “Effects on Historical Earnings per Unit of Master Limited Partnership. Read More.