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Bank Regulators Add Guidance for FASB Credit Loss Standard

Several bank regulators have updated their interpretive guidance regarding the Financial Accounting Standards Board’s (“FASB”) credit loss standard. The revised guidance from Federal Deposit Insurance Corporation, Federal Reserve, the National Credit Union Administration, and the Office of the Comptroller of the Currency will be added to the December 2016-published frequently asked questions document that explains why the FASB issued Accounting Standards Update No. No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance addresses how to handle subjective information when banks estimate their loss reserves when applying ASU No. 2016-13. In. Read More.

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FASB Still Working to Address Disclosure Overload in Financial Statement Footnotes

Since 2014, the Financial Accounting Standards Board (“FASB”) has been working to simplify U.S. GAAP disclosure requirements for financial statement footnotes. The project, which was released under Proposed Statement of Financial Accounting Concepts No. 2014-200, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, aimed to avoid writing rules that would lengthen a company’s financial statements without benefiting investors. Despite its efforts, the FASB has received frequent complaints from companies who were frustrated over the various disclosure requirements. Board representatives are also concerned about what they consider disclosure overload. They believed investors were becoming overwhelmed with additional information that. Read More.

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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.

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AICPA Publishes New Technical Questions and Answers

The following Technical Questions and Answers guidance was issued by the American Institute of Certified Public Accountants (“AICPA”) under Section 9160, Other Reporting Issues: Section 9160.31, Following Accounting Standards as Promulgated by FASB by a State or Local Governmental Entity. Section 9160.31 covers how an auditor should decide whether a government entity is following the applicable accounting standards. Section 9160.32, Reporting on Accounting Standards as Promulgated by FASB by a State or Local Government. Section 9160.32 offers guidance on how an auditor should report on a government entity’s financial statements, when the entity prepares its financial statements under the Financial. Read More.

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Industry-Specific Revenue Standard Implementation Guidance Proposed

On July 3, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee released four working drafts on the Financial Accounting Standards Board’s revenue recognition standard. The working drafts are tailored to the following four industries: Airlines. Working Draft: Airlines Revenue Recognition Implementation Issue #2-1: Regional Contracts addresses capacity purchase agreements established by major airlines with regional carriers to reach smaller markets. The working draft applies the guidance in Topic 840, Leases, to the aspects of a capacity purchase agreement that are not deemed leases. In addition, the working draft instructs air carriers how Topic 606, Revenue From Contracts With Customers, is to be employed to review the various. Read More.

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Minor Changes Proposed to Top Accounting Standards

In the next few months, the Financial Accounting Standards Board (“FASB”) plans to issue proposed updates with several limited revisions to its leases and classification and measurement standards. Announced during the FASB’s June 21 meeting, the proposed amendments will be released separately from the usual group of technical corrections the board issues each year due to the importance of the affected Accounting Standards Updates (“ASU”). The changes involve 16 amendments to ASU No. 2016-02, Leases (Topic 842), including fixing cross references, aligning terminology with other aspects of U.S. GAAP, and clarifying the categorization of leases if the terms and conditions. Read More.

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