CPAs and Advisors with Your Growth in Mind

FASB Seeks to Align Accounting Guidance Between Asset Acquisition and Business Combinations

There’s an effort underway by the Financial Accounting Standards Board (“FASB”) to look at closing the gap between the accounting standards for business combinations and the accounting standards for acquisition accounting. Because these two sets of accounting guidance are different, businesses are sometimes motivated to structure merger and acquisition (“M&A”) deals in ways that avoid complex accounting. Decreasing the differences between these standards could help make M&A activity more straightforward in the future. This effort is also a continuation of the FASB’s work to more clearly define what a business is for U.S. generally accepted accounting principles (“GAAP”). Some critics. Read More.

Topics: , , , , , , ,

New GASB Statement on Leases Issued

The Governmental Accounting Standards Board (“GASB”) has issued a new single model to help state and local governments report leasing agreements. GASB Statement (“GASBS”) No. 87, Leases, categorizes leases as financing arrangements that allow customers to use the leased asset. Per the standard, governments that act as lessees must report a liability for the contract, as well as report an intangible asset indicating their ability to use the leased item. For government entities that are lessors, they must disclose a receivable for the lease and a deferred inflow of resources. Nonfinancial assets such as vehicles, heavy equipment, and property are. Read More.

Topics: , , , , ,

Nonfinancial Assets Guidance to Coincide with FASB Revenue Standard

The Financial Accounting Standards Board’s (“FASB”) latest Accounting Standards Update (“ASU”) clarifies guidance to help determine when gains and losses on nonfinancial assets should be recognized. Issued as ASU No. 2017-05, Other Income—Gains and Losses From the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, the amendments clarify the term “in substance nonfinancial asset” to inform financial reporting professionals which transactions are part of the nonfinancial asset derecognition guidance. The FASB had failed to define the term in ASU No. 2014-09, Revenue From Contracts With Customers (Topic. Read More.

Topics: , , , , , , ,

FASB Approves Nonfinancial Assets Guidance Proposal

The Financial Accounting Standards Board (“FASB”) recently approved most of the planned changes to its accounting guidance for sales and disposals of nonfinancial assets. Outlined in Proposed Accounting Standards Update No. 2016-250, Other Income — Gains and Losses From the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, the proposed amendments are part of the FASB’s wider efforts to help companies differentiate between a business acquisition or sale and the acquisition or sale of a group of assets. The FASB confirmed the proposal’s main principle, which requires. Read More.

Topics: , ,

Nonfinancial Asset Derecognition Guidance Update Issued

Phase 2 of the Financial Accounting Standards Board’s (“FASB”) three-phase project to clarify the definition of a “business” is officially underway. Last week, the FASB issued Proposed Accounting Standards Update, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which aims to simplify the guidance for nonfinancial asset recognition. The proposed changes include clarifying the scope of Subtopic 610-210 and partial sales of nonfinancial assets, and improving consistency on what is considered an “in substance nonfinancial asset.” Comments on the. Read More.

Topics: , ,

Decisions Reached on Accounting for Partial Sales of Nonfinancial Assets

The Financial Accounting Standards Board (“FASB”) recently reviewed the project on clarifying the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, which is part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). During its February 17th meeting, the FASB decided not to offer explicit guidance regarding the sales of undivided interests in Subtopic 610-20. The FASB also decided to maintain consistency with Topic 606 and require the assessment of control to be reviewed from the counterparty’s perspective. For transition purposes, the FASB decided that Subtopic 610-20 will go into. Read More.

Topics: , , , ,