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 Published in 1985, the guidance has since been rescinded.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.
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.
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.
FASB Could Align Definition of a Collection with U.S. GAAP
When the Financial Accounting Standards Board (“FASB”) meets tomorrow, board members may align U.S. GAAP’s definition for “collection” with the American Alliance of Museums’ (“AAM”) definition. The decision would address museums’ struggles with determining the value of art collections and artifacts in complying with the AAM’s policies since the organization grants museum accreditations. Museums also seek GAAP-compliant statements. To be considered a collection, artwork and historical treasures must be used for public exhibition, education, or research for public service and not financial gain; protected, cared for, and preserved; and bound by a policy requiring that the sales proceeds be used. Read More.
FASB to Review Revenue Standard Implementation Costs
The Financial Accounting Standards Board (“FASB”) plans to examine how companies implement its revenue recognition standard when the guidance goes into effect next year. At a December 14 meeting, FASB Chairman Russell Golden stated that the board would undertake a comprehensive review of Accounting Standards Codification 606, Revenue From Contracts With Customers, to adjust its education process for future guidance, boost outreach with financial software providers, and find ways that could reduce implementation costs of significant standards. Golden said the review would focus on companies that have already implemented revenue. In particular, the FASB wants to know what were the. Read More.
FASB Drops Materiality Project
After two years of controversy, the Financial Accounting Standards Board (“FASB”) is scrapping plans to continue work on its proposal to amend the definition of materiality. The project, which commenced in September 2015, set out to align U.S. GAAP’s meaning of materiality with the legal interpretation regulators and courts use so companies can carefully decide their disclosures in financial statement footnotes. Work on the materiality amendments ended Wednesday, November 8. Board members did not expect to receive criticism for Proposed Accounting Standards Update No. 2015-310, Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material. Wall Street investors led the. Read More.