FASB Continues U.S. GAAP Simplification Initiative
Hoping to streamline inventory measurement and remove the requirements for extraordinary items, the Financial Accounting Standards Board recently released two proposed Accounting Standards Updates. The proposals, which are part of FASB’s efforts to simplify U.S. GAAP , include: — Inventory (Topic 330): Simplifying the Measurement of Inventory. This proposal is in response to stakeholder concerns about the current guidance on measuring inventory. Currently, reporting entities are required to measure inventory at the lower of cost or market. The new guidance would require inventory to be measured at the lower of cost and net realizable value. Thus, it would eliminate existing requirements to consider the replacement cost. Read More.
Joint Transition Resource Group Preps Agenda for Initial Meeting
Following the creation of its Joint Transition Resource Group for Revenue Recognition (“the Group”) last month, the Financial Accounting Standards Board (“FASB”) and International Accounting Standards Board (“IASB”) are preparing for the advisory panel’s first meeting. Scheduled for July 18th, the meeting’s agenda will cover four issues identified by the boards. Based on feedback from companies, auditors, investors and regulators, the issues addressed during the meeting include: Calculating intangible goods and services revenue; Modifying revenue for additional fees and charges; Including royalties and intellectual property licenses into a revenue amount; and Incorporating amortization or write-down expenses into a revenue amount. Read More.
Topics: Accounting Standards Update, Advisory, Audit, Financial Accounting Standards Board "FASB", intangible goods, Intellectual Property, International Accounting Standards Board "IASB", investors, Joint Transition Resource Group for Revenue Recognition
AICPA Releases Updates to AAG Standards and Audit Risk Alert
Published on June 26th, the American Institute of Certified Public Accountants (“AICPA”) issued updates to five Audit and Accounting Guides (“AAG”). The AAG updates include the following: Compilation and Review Engagements now offers interpretive guidance on recent adjustments to the Statements on Standards for Accounting and Review Services for compilation and review engagements. The Construction Contractors update includes simplified versions of the Auditing Standards Board’s audit standards and Professional Ethics Executive Committee’s Ethics Code of Professional Conduct. Investment Companies reflects modifications to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (ASU) No. 2013-08, Financial Services-Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements, the. Read More.
Topics: AAG Standards, Accounting Standards Update "ASU", American Institute of Certified Public Accountants "AICPA", Audit, Audit and Accoutning Guide "AAG", Audit Risk, Balance Sheet, disclosure, Ethics, Financial Accounting Standards Board "FASB", Investment Companies, Investment Company Act, Professional Ethics Executive Committee "PEEC", Public Company Accounting Oversight Board "PCAOB", U.S. Securities and Exchange Commission "SEC"
FASB’s Going Concern Amendment to Affect PCAOB Standards
In the coming weeks, the Financial Accounting Standards Board (“FASB”) plans to release an amendment that requires struggling companies to inform investors regarding their chances of surviving. Entitled proposed Accounting Standards Update No. 2013-300, Presentation of Financial Statements (Topic 205)—Disclosure of Uncertainties about an Entity’s Going Concern Presumption, the update is in response to investors and regulators who believed auditors issued going concern reviews of companies after the stock price mirrored the market’s knowledge of their pending demise. Per the FASB’s final update to U.S. GAAP, a company will be required to add in its financial statement footnotes when “substantial. Read More.
Topics: Accounting Standards Update, American Institute of Certified Public Accountants "AICPA", Audit, Auditing Standards Board "ASB", Bruce Webb, disclosure, Financial Accounting Standards Board "FASB", Financial Statements, Going Concern, International Financial Reporting Standards "IFRS", Public Company Accounting Oversight Board "PCAOB", U.S. GAAP, U.S. Securities and Exchange Commission "SEC"
FASB and IASB Merging Utilities Industry Standards Not Likely
After attempts to merge utilities industry standards with the International Accounting Standards Board (“IASB”), Financial Accounting Standards Board (“FASB”) member Thomas Linsmeier recently announced that U.S. GAAP and IFRS differences have created challenges that make potential future convergence projects unlikely. At an accounting conference last month, Linsmeier referenced the FASB and IASB’s heavy investment in utilities financial reporting, and their preference in the U.S. GAAP’s cost-of-service model. However, the IASB is considering other models that differ from Topic 980, Regulated Operations, a decades-long model which offers standards for utilities that recognize regulated assets and liabilities within the industry. Further, the. Read More.
IASB Vice Chair Denounces FASB’s Separate Agenda
After working with the Financial Accounting Standards Board (“FASB”) for 12 years on merging U.S. GAAP and International Financing Accounting Standards (IFRS), the International Accounting Standards Board’s (“IASB”) Ian Mackintosh recently criticized the FASB for its decision to stray from their original course of action. Speaking at the IFRS Foundation Conference on June 23rd, the IASB Vice Chair acknowledged the successes of IFRS adoption in over 100 nations, but condemned the FASB for diverging from the goal of creating a single set of global standards. In his speech, Mackintosh called out FASB Vice Chair James Kroeker for comments perceived as. Read More.
Topics: Convergence, Financial Accounting Foundation "FAF", Financial Accounting Standards Board "FASB", Global Standards, Ian Mackintosh, International Accounting Standards Board "IASB", International Financial Reporting Standards "IFRS", James Kroeker, Mary Jo White, Revenue Recognition, U.S. GAAP