FASB to Monitor Financial Reporting Impact of Tax Reform
The Financial Accounting Standards Board (“FASB”) has no plans to issue new guidance on the Tax Cuts and Jobs Act (“TCJA”). During a November 14 meeting on the financial reporting impact of tax reform, FASB researchers said Big Four firms’ guidance, FASB accounting staff’s technical inquiries, and U.S. GAAP have helped companies answer some of the complicated financial reporting issues caused by the tax law change. Despite holding off on issuing new tax reform guidance, the FASB still plans to monitor whether any necessary future action should be taken. The staff will especially keep a close eye on the global. Read More.
Upcoming Changes to the SOC 2 Reporting Framework
Is your organization prepared for the upcoming changes to the SOC 2 reporting framework? All SOC 2 reports issued with a reporting period ending after December 15, 2018, must comply with the new Trust Services Criteria (also known as TSP 100) issued by the Assurance Services Executive Committee of the American Institute of Certified Public Accountants. SOC 2 reports evaluate the effectiveness of controls over the security, availability, processing integrity, confidentiality, and privacy of information processed by systems at an entity, division, or operating unit level. Revisions to the trust services criteria include an alignment of criterion with the Committee. Read More.
New PCAOB Leadership Approves Budget Increases
By a unanimous vote on November 15, the Public Company Accounting Oversight Board (“PCAOB”) approved its budget for 2019. Next year’s PCAOB budget will be $273.7 million, a $13.8 million rise from 2018. PCAOB member Jay Brown remarked that the 2019 budget reflects careful consideration of the resources the audit regulator needs to carry out its mission to protect the interest of investors and the public. Such resources include the addition of several positions, like chief compliance officer and chief risk officer. Brown also said next year’s budget adds liaison positions responsible for conducting outreach to the PCAOB’s stakeholders. The. Read More.
Investment Companies Receive Update to Interpretive Guidance
The Securities and Exchange Commission’s (“SEC”) Division of Investment Management has revised its interpretive guidance to help investment companies meet updated reporting requirements. Issued under the Investment Company Reporting Modernization Frequently Asked Questions, the updated guidance clarifies the final rules in Release No. 33-10231, Investment Company Reporting Modernization. Release No. 33-10231 increases fund company disclosures regarding investment holdings. The update to the Investment Company FAQs states that reports on Form N-PORT, a new monthly portfolio form, do not need to be filed if a fund has been liquidated, merged or terminated and has no investments remaining despite not yet deregistering with. Read More.
2018 Audit Committee Transparency Barometer Released
The Center for Audit Quality and Audit Analytics have issued the fifth edition of their Audit Committee Transparency Barometer , an annual report aimed to help companies and audit committees improve how they communicate to investors, regulators and the public. Per this year’s report, investors and other stakeholders continue to have more information disclosed to them. In addition, more S&P 500 companies are disclosing their considerations in appointing an audit firm, and sharing criteria for reviewing an audit firm. Download the 2018 Audit Committee Transparency Barometer from the Center for Audit Quality website.
Task Force Proposes Amended Accounting for TV Production
In response to the rapidly evolving television production and distribution business models like online streaming services, the Financial Accounting Standards Board’s (“FASB”) Emerging Issues Task Force (“EITF”) has proposed an update to U.S. GAAP. Issued by the FASB as Proposed Accounting Standards Update (“ASU”) No. 2018-280, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, a Consensus of the FASB’s Emerging Issues Task Force, the proposal would update Accounting Standards Codification (“ASC”) 926-20, Entertainment—Films—Other Assets—Film Costs, to require television show creators to account for production costs similarly. Read More.