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FASB Proposes Codification Improvements

The Proposed Accounting Standards Update, Codification Improvements, has been issued by the Financial Accounting Standards Board (“FASB”) to help improve certain aspects of U.S. GAAP. Covered in the proposal are the following: Comprehensive Income – Overall (Subtopic 220-10): The proposal clarifies that the disclosure of tax benefits concerning deductible temporary differences and carryforwards resulting from a semi-reorganization as defined under Subtopic 852-20, are not considered comprehensive income. Debt—Modifications and Extinguishments (Subtopic 470-50): The proposal clarifies that when the fair value option is selected on extinguished debt, the extinguished debt’s net carrying amount matches its fair value at the reacquisition date.. Read More.

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FASB Working to Fix Inconsistencies of U.S. GAAP

The Financial Accounting Standards Board (“FASB”) has released a proposed Accounting Standards Update to eliminate inconsistencies in parts of the U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Impacting various areas in the FASB Accounting Standards Codification, the proposed changes will apply to all reporting entities within the scope of the related accounting guidance.  Some of the amendments under Proposed Accounting Standards Update No. 2017-320 Codification Improvements, impact: Subtopic 718-740, Compensation—Stock Compensation—Income Taxes: The FASB proposes clarifying that an entity must disclose excess tax benefits (or tax deficiencies) in the reporting period when the tax deduction for compensation expense is taken on its. Read More.

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Stock Award Modifications Guidance Updated

Guidance has been issued regarding whether the terms and conditions of share-based payments require modification accounting. Last week, Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. The new ASU requires that a modification accounting be applied unless the following conditions are met: The modified award’s fair value is equal to the original award’s fair value The modified award’s vesting conditions is equal to the original award’s vesting conditions The modified award is categorized in the same way as the original award (as either an equity instrument or a liability. Read More.

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Proposal for Nonemployee Share-Based Payments Issued

The Financial Accounting Standards Board (“FASB”) issued for public comment the proposed Accounting Standards Update (“ASU”), Compensation— Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The proposal is aimed to lower costs and confusion over financial reporting for non-employee share-based payments. If approved, the scope of Topic 718, Compensation—Stock Compensation, would be expanded to include payments to non-employees. In addition, standard would replace Subtopic 505-50, Equity—Equity Based Payments to Non-Employees. Comments are due Monday, June 5. An effective date for the proposed ASU will be decided after the FASB reviews all submitted feedback. More on the proposal is available at FASB.org.

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FASB Makes Progress on Stock Compensation Standard

After reviewing feedback on its proposed changes to stock compensation accounting, the Financial Accounting Standards Board (“FASB”) agreed that companies must apply the modification accounting under Topic 718 if an alteration to an award impacts the fair value (or assessed value or intrinsic value, if a different measurement technique is used), vesting conditions, or the award classification. The FASB said Wednesday that the proposed Accounting Standards Update (“ASU”), Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, should exclude guidance that allows an entity to decide whether a modification to an award’s fair value is insignificant. In addition, the unit of. Read More.

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Share-Based Payment Accounting Proposal Issued

Amendments have been proposed concerning share-based payment awards. The Financial Accounting Standards Board issued the proposed Accounting Standards Update, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting, which offers guidance on certain changes to the terms or conditions of a business’ share-based payment that require the application of modification accounting under Topic 718. A business must account for the impact of a modification, unless the fair value, vesting conditions, and classification of the award all stay the same immediately prior to and after the modification. The disclosure requirements under Topic 718 would apply regardless when a company must. Read More.

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