FASB Supports Improvements to Convertible Instrument Disclosures
At last week’s meeting, the Financial Accounting Standards Board (“FASB”) announced support for making several improvements to convertible instrument disclosures. Improvements include changing the format in which convertible instruments information is disclosed to investors. The FASB decided not to require such disclosures to be presented in a tabular format, instead opting to give issuers the freedom to select between a tabular or narrative disclosure. Last week’s decision is part of the board’s ongoing efforts to streamline its liabilities and equities accounting guidance. Many critics believe the guidance under FASB Accounting Standards Codification 480, Distinguishing Liabilities From Equity, features too many internal. Read More.
SEC Commissioner Condemns Registration Requirements for Private Funds
At a recent event hosted by the Bipartisan Policy Center, the Securities and Exchange Commission’s (“SEC”) Hester Peirce expressed criticism about the registration provisions for private funds. The SEC commissioner said such funds are not a systemic risk to the financial system, but they are often viewed as banks. Rather than rely on the Dodd-Frank Act-mandated requirements, she wants to do away with the provisions altogether. While preferring that there is no mandatory registration of private fund managers, Peirce is open to curtailing the requirements. She highlighted the difficulty in determining where the systemic risk comes from in this part. Read More.
PCAOB to Clarify Hiring of Hearing Officers
The Public Company Accounting Oversight Board (“PCAOB”) has proposed amendments to affirm that its hiring practices for hearing officers for auditor disciplinary proceedings are subject to approval by the Securities and Exchange Commission (“SEC”). Announced last week, the proposed changes come after last summer’s Supreme Court ruling in Lucia vs. SEC that the agency’s process for hiring administrative law judges was unconstitutional. The Supreme Court stated that under the Appointments Clause of the U.S. Constitution, administrative law judges are inferior officers and must be appointed by the president, a court of law, or a department head (e.g, the SEC). The. Read More.
Cherry Bekaert Associates Attend IRS’ Opportunity Zone Hearing
Cherry Bekaert’s Rick Schneider, CPA , and Polly Hoxha, CPA, attended Thursday’s hearing on proposed regulations concerning investments in qualified opportunity funds. With standing room only, the hearing allowed the Internal Revenue Service (“IRS”) to review feedback on creating the regulations. During the five-hour meeting, over two dozen stakeholders expressed their concerns and offered suggestions for how to improve the rules of the program. Here’s a video of Polly during a break at the hearing. If you’re seeking guidance on the Opportunity Zone program and want a recap of the IRS hearing, we invite you to attend one of our upcoming Opportunity Zone seminars .
Finance Companies Lacking in Digital Transformation
Based on recent findings by the Association of International Certified Professional Accountants, organizations are missing out on significant growth potential. In a report published on January 17, only 11 percent of finance executives surveyed are using artificial intelligence. The report also discovered over one-third of executives spend more time gathering data than analyzing data. Other survey findings include chief financial officers needing to speed up digital transformation across operational excellence, digital intelligence and business influence. For instance, 13 percent of respondents said they have curtailed robotic process automation mostly due to concerns over data security. Almost two-thirds of large companies. Read More.
Corp Fin Issues Interpretive Guidance on Board Diversity Disclosures
The Securities and Exchange Commission’s Division of Corporation Finance (“Corp Fin”) has issued new interpretive guidance to clarify company disclosures on board diversity. Presented in a question-and-answer format, the new guidance adds an item to the Compliance and Disclosure Interpretations (“C&DIs”): Regulation S-K concerning Subpart 400 of Regulation S-K, which covers information separate from what companies must disclose in financial statements. Subpart 400 concerns details associated with corporate governance matters such as executive pay and board director qualifications. Question 116.11 of the C&DIs inquires what aspects regarding a board member with respect to diversity must be disclosed under Item 401.. Read More.