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SEC Lightens Disclosure Requirements for Public Companies

As part of its Disclosure Simplification initiative, the Securities and Exchange Commission (“SEC”) has published a rule to reduce a public company’s disclosure requirements. Issued as Release No. 33-10532, Disclosure Update and Simplification, the final amendments will help public companies with their regulatory reporting without denying investors of information beneficial to their investment-making decisions. The changes aim to implement the provisions under Section 72002(2) of the Fixing America’s Surface Transportation Act and mostly follow the proposed versions published under Release No. 33-10110, Disclosure Update and Simplification. The changes will be effective 30 days after their publication in the Federal Register. Meanwhile, the. Read More.

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FASB Wants Public Companies for Segment Reporting Study

Marking the first phase of its segment reporting outreach, the Financial Accounting Standards Board (“FASB”) is requesting that public companies participate in a study to improve U.S. GAAP guidance regarding the aggregation of operating segments and the reportable segments method. Specifically, the FASB wants public companies to share how they apply the criteria under FASB Accounting Standards Codification (“ASC”) 280, Segment Reporting, and how two alternatives would impact how their financial statements are presented. One alternative involves reorganizing the process for deciding which operating segments are reported and moving the quantitative thresholds for reportable segments to an earlier stage of. Read More.

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FASB to Resume Quarterly Disclosure Project

After a three-year pause, the Financial Accounting Standards Board (“FASB”) will resume its project to improve the information companies disclose in quarterly financial statements. The FASB has held regular talks about the project, but the board has failed to discuss quarterly disclosure requirements since agreeing in January 2015 to amend Topic 270, Interim Reporting. Continuing the quarterly disclosure project is part of the FASB’s overarching goal of improving U.S. GAAP disclosure requirements and determining how it establishes disclosure requirements in accounting standards. Meanwhile, the FASB is close to publishing its disclosure framework that will be used as a reference guide. Read More.

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FASB Deems Regulatory Guidance from Financial Services Standard Irrelevant

The Financial Accounting Standards Board (“FASB”) has published a small U.S. GAAP update that removes decades-old bank regulatory guidance from its financial services standard. Accounting Standards Update No. 2018-06, Codification Improvements to Topic 942: Financial Services—Depository and Lending, eliminates a reference to the Office of the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges, from FASB Accounting Standards Codification 942-740-45-1, Financial Services—Depository and Lending—Income Taxes — Other Presentation Matters — Differences Between Regulatory Accounting Principles and GAAP. Published in 1985, the guidance has since been rescinded. Per the FASB, the Codification guidance related to the. Read More.

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FASB to Review Backwards Tracing Related to Tax Reform

The Financial Accounting Standards Board’s (“FASB”) research team plans to review how the tax code changes stemming from the Tax Cuts and Jobs Act (“TCJA”) will impact backwards tracing, which is a practice U.S. GAAP currently prohibits. Backwards tracing is a practice in which the impact of a change in a deferred tax credit or charge is included in the same line item wherein the deferred taxes were initially recorded. According to FASB staff member Jason Bond, the board wants to review the costs of backwards tracing and consider alternatives to determine whether the benefits outweigh the costs. Bond remarked. Read More.

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CAQ Report to Help Audit Committees with Non-GAAP Oversight

In its new report, Non-GAAP Measures: A Roadmap for Audit Committees , the Center for Audit Quality (“CAQ”) offers oversight guidance to audit committees concerning financial measures outside of U.S. Generally Accepted Accounting Principles (“GAAP”). The CAQ advises audit committees to take the following actions with companies: Evaluate whether the disclosed non-GAAP measures and related information support a company’s general strategy and performance. Decide whether management’s internal policy features guidelines for defining how non-GAAP measures are created, calculated, and disclosed. Talk with management about how a company decides to change non-GAAP measures it discloses and its rationale for making such changes. Ask a company to compare its. Read More.

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