FASB Discusses Improvements to Insurance Company-Issued Long-Duration Contracts
Deliberations continued last week on the Financial Accounting Standards Board’s (“FASB”) proposed Accounting Standards Update, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. The proposal aims to improve financial reporting for long-duration contracts issued by insurance companies. In discussing the proposed standard, the FASB focused on the discount rate reset upon initial adoption, affecting the liability for future policy benefits for traditional and limited-payment contracts. The FASB decided to update the modified retrospective transition method discount rate, by which as of the transition date, an insurance company would maintain the discount rate assumption for calculating net premiums. Read More.
FASB Proposes Improved Collaborative Arrangements Guidance
A newly proposed Accounting Standards Update (“ASU”) by the Financial Accounting Standards Board (“FASB”) offers organizations improved guidance regarding collaborative arrangements. The proposed ASU, Collaborative Arrangements (Topic 808): Targeted Improvements , focuses on changes to generally accepted accounting principles related to collaborative arrangements. One proposed change includes adding unit-of-account guidance under Topic 808, which would align the guidance with Topic 606, Revenue from Contracts with Customers, limited to when a company is reviewing the nature of Topic 606. The FASB also proposes two clarifications, such as defining when certain transactions concerning collaborative participants must be accounted for as revenue under Topic 606 when the collaborative member. Read More.
FASB to Curtail Fair Value Disclosure Requirements
The Financial Accounting Standards Board (“FASB”) has finalized amendments that would prevent companies from disclosing irrelevant and unnecessary information on financial statement footnotes related to how they measure the fair value of select assets and liabilities. Decided at the FASB’s March 7 meeting, the amendments will be based on Proposed Accounting Standards Update No. 2015-350, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The FASB believes the changes will lower costs for companies and improve disclosures for investors and analysts. Companies will have to adopt the amended disclosure requirements for fiscal. Read More.
FASB Receives Support for Proposed Tax Reform Guidance
Numerous banking institutions, insurers, and financial trade organizations support the Financial Accounting Standards Board’s (“FASB”) proposed response to the Tax Cuts and Jobs Act. In comment letters on Proposed Accounting Standards Update (“ASU”) No. 2018-210, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income, groups like the American Bankers Association urged the FASB to approve its proposed amendment. Proposed ASU No. 2018-210 aims to reduce the accounting effects of complying with the new tax law and simplify financial statements for investors. The FASB released the proposal after banks and insurance companies raised concerns over certain requirements introduced by the Tax Cuts and Jobs Act. Under. Read More.
Topics: corporate income tax rate, Deferred Taxes, FASB, Financial Accounting Standards Board "FASB", Other Comprehensive Income, Proposed Accounting Standards Update, Tax Cuts and Jobs Act, Tax Reform
FASB Proposes Tax Cuts and Jobs Act Guidance
A proposed Accounting Standards Update has been issued reflecting provisions resulting from the Tax Cuts and Jobs Act. The Financial Accounting Standards Board’s (“FASB”) proposal addresses concerns over present Generally Accepted Accounting Principles requiring companies to amend deferred tax liabilities and assets after changes to tax laws or rates. The proposed amendments are expected to reduce the stranded tax effects related to the corporate income tax rate change and improve the helpfulness of information shared with financial statement users. According to Proposed Accounting Standards Update No. 2018-210, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects. Read More.
FASB to Release Standard and Propose Transition Guidance on Leases
A final Accounting Standards Update (“ASU”) and a proposed standard by the Financial Accounting Standards Board (“FASB”) aim to lower costs and make it easier for preparers to implement its leases guidance. The FASB will issue a final standard that gives organizations an optional transition practical expedient to reconsider their accounting for current land easements that are not presently accounted for in Topic Accounting Standards Codification (“ASC”) 840, Leases. The standard also affirms that once the guidance is active, new or modified land easements must be reviewed under ASC Topic 842, Leases. Separately, FASB staffers were ordered to draft a. Read More.