Outgoing FASB Member Reflects on Tenure
As his tenure on the Financial Accounting Standards Board (“FASB”) winds down, Lawrence Smith is looking back on the accomplishments he helped the board achieve. In a letter on the FASB website, Smith highlights efforts of the past 15 years (10 on the board, 5 as staff member) such as the Accounting Standards Codification, the elimination of qualifying special purpose entities, and the new leases standard. Smith also discusses some of his regrets while with the FASB, and recommends future efforts the board should undertake. Smith’s full letter can be viewed on FASB.org.
ASBCA Holds that Leases are not Necessarily Subject to CAS 404
In Exelis, Inc., ASBCA No. 60131 (29 Aug. 2016), the Armed Services Board of Contract Appeals (“ASBCA”) held that a concern whether a building lease was a capital lease or an operating lease is not subject to Cost Accounting Standards (“CAS”) 404. In 2007, the Defense Contract Audit Agency (“DCAA”) released its audit of Exelis’ 2004 final indirect cost rates. DCAA questioned Exelis’ lease costs, finding that the building lease was a capital lease instead of an operating lease as claimed by Exelis and that Exelis could only include building depreciation in its indirect cost pool rather than the entire. Read More.
Topics: Armed Services Board of Contract Appeals "ASBCA", Cost Accounting Standards "CAS", Defense Contract Audit Agency "DCAA", Defense Contract Management Agency "DCMA", Federal Acquisition Regulation "FAR", GAAP, Indirect Cost Rates, leases
FASB Announces Top Priorities for 2017
After issuing several key Accounting Standards Updates and announcing new board members last year, the Financial Accounting Standards Board (“FASB”) is preparing for a busy 2017. In a five-minute video, FASB Technical Director Sue Cosper outlines the FASB’s top priorities for this year. The FASB’s top priorities for 2017 include: Finalizing the hedging and long-duration insurance standards; Supporting the implementation of its revenue recognition, leases, and credit losses standards; Potential improvements to nonprofit financial reporting, particularly distinguishing between exchanges and contributions; and Redeliberating feedback on the Invitation to Comment and continuing to focus on its Conceptual Framework. Click here to watch the video.
Topics: Accounting Standards Update "ASU", Conceptual Framework Project, FASB Nonprofit Standard, Financial Accounting Standards Board "FASB", Hedging, Invitation to Comment, leases, Leases (Topic 842), Long-Duration Insurance, Revenue from Contracts with Customers (Topic 606), Revenue Recognition
Comment Letters Ask FASB to Limit Future Projects
Some trade groups want the Financial Accounting Standards Board (“FASB”) to provide more leeway for implementing current accounting standards before taking on new projects. In feedback to the FASB’s Invitation to Comment, Agenda Consultation, groups like the American Bankers Association (“ABA”) asked the board to consider the time and costs needed when new standards are implemented. The ABA also noted that standards involving revenue, leases, credit losses and financial instrument measurement and classification require significant undertaking that could last over several years. Other comment letters to the agenda consultation document came from the Institute of Management Accountants (“IMA”), which advised. Read More.
Topics: American Bankers Association "ABA", Credit Losses, Financial Accounting Standards Board "FASB", Financial Instruments, financial reporting, Institute of Management Accountants "IMA", leases, U.S. GAAP
GASB to Hold Meetings August 10-12
Beginning Wednesday, the Governmental Accounting Standards Board (“GASB”) will hold a series of meetings at its Norwalk offices. According to the GASB Notice of Meetings , the following topics will be discussed this week: The preballot draft of the proposed Exposure Draft, Certain Debt Extinguishments; The proposed Exposure Draft, Omnibus; Asset retirement obligations; Fiduciary activities; Leases; Financial reporting model; Revenue and expense recognition; and The GASB’s technical plan for the end of 2016. The GASB’s three-day meeting is expected to start Wednesday at 8:30 a.m. ET. With the exception of Thursday evening’s administrative session from 5:15 p.m. – 6:15 p.m. ET, all meeting sessions. Read More.
SEC Deputy Chief Accountant Speaks at Financial Reporting Conference
As guest speaker at the 15th Annual Baruch College Financial Reporting Conference, Securities and Exchange Commission (“SEC”) Deputy Chief Accountant Wesley Bricker expressed his views on the current transition period undertakings for the upcoming revenue recognition and leases standards, and the Financial Accounting Standards Board’s proposal for financial instruments’ credit impairment. He also cautioned companies that presenting non-generally accepted accounting principles in public filings, especially adjustments to revenue, will increase the likelihood of receiving an SEC comment letter. He also spoke about the Public Company Accounting Oversight Board’s efforts to encourage auditor attention on financial reporting risks. A transcript of Bricker’s speech is available on. Read More.