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FASB Makes Updates to Technical Agenda

At its September 20 public meeting, the Financial Accounting Standards Board (“FASB”) agreed to add the following three projects to its technical agenda: A project on differentiating liabilities and equity, with a emphasis on indexation and settlement, convertible debt, disclosures, and earnings per share A section of the FASB’s Financial Performance Reporting Research project aimed at the disaggregation of performance reporting by function and nature A narrow-scoped project on segment reporting aimed at improving the aggregation criteria and segment disclosures The addition of these projects completes the last stage of the FASB’s agenda consultation project. Also at the meeting, the. Read More.

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Recap of Private Company Council’s July 11 Meeting

Private Company Council (“PCC”) and Financial Accounting Standards Board (“FASB”) members met Tuesday to discuss stakeholder feedback from the June 13 private company town hall meeting. In addition, the PCC offered input on the following FASB projects: Consolidation Targeted Improvements to Related Party Guidance for Variable Interest Entities Liabilities and Equity—Targeted Improvements Cloud Computing (EITF Issue No. 17-A) Nonemployee Share-Based Payment Accounting Improvements Invitation to Comment on Agenda Consultation Balance Sheet Classification of Debt Updates on these FASB projects and a full meeting recap are available on the PCC website.

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Short-Term Fixes to Liabilities and Equity Accounting in the Works

As accountants continue to struggle with differentiating liabilities and equity, Financial Accounting Standards Board (“FASB”) members have agreed to take action. Last week, Chairman Russell Golden ordered the FASB’s research team to develop short-term solutions that the board could quickly implement, and also continuously monitor significant problems that may require long-term answers. Golden said this approach would take longer, but making targeted changes to Topic 480, Distinguishing Liabilities From Equity, will be helpful. Possible changes may include new disclosures regarding financial instruments with characteristics of both equity and liabilities, streamlining how to split the measurement of hybrid instruments, and reorganizing. Read More.

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Decisions Reached on Distinguishing Liabilities from Equity Project

At its May 10 meeting, the Financial Accounting Standards Board (“FASB”) reached the following decisions on its proposed Accounting Standards Update, Distinguishing Liabilities from Equity (Topic 480): I. Accounting for Certain Financial Instruments with Down Round Features, and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception: Display (Earnings Per Share). Impacting companies within the scope of Topic 260, Earnings Per Share, an earnings per share (“EPS”) numerator modification will be required to income offered to common shareholders in basic EPS for equity-classified freestanding financial instruments. Additionally,. Read More.

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Highlights from the Private Company Council’s Tuesday Meeting

The following is a recap of Financial Accounting Standards Board (“FASB”) projects discussed at Tuesday’s Private Company Council (“PCC”) meeting: Disclosure Framework. Numerous PCC members expressed support for the project, particularly the inventory exposure draft. The PCC also provided feedback on various portions of the project. Financial instruments—Hedge Accounting. Many PCC members favor the standard, including guidance to give private companies additional time to disclose hedge effectiveness. Liabilities and Equity—Targeted Improvements. Feedback received on the Exposure Draft was discussed, as well as the FASB’s research on an alternative to help streamline financial instruments accounting with “down round” features. The FASB was encouraged. Read More.

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FASB Makes Decisions on Targeted Improvements to Liabilities and Equity

During its March 22 meeting, the Financial Accounting Standards Board (“FASB”) reviewed comment letters received on its proposed Accounting Standards Update—Distinguishing Liabilities from Equity (Topic 480): I. Accounting for Certain Financial Instruments with Down Round Features, and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. As a result of the discussions held and feedback received, the FASB asked staff members to conduct research on a possible alternative that would impact the measurement of down round features, but not the classification. Further, the FASB. Read More.

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