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.
SEC Updates Disclosure Rules for Mining Companies
Mining companies must give investors more comprehensive details on their properties. The decision is a result of the Securities and Exchange Commission’s (“SEC”) issuance of Release No. 33-10570, Modernization of Property Disclosures for Mining Registrants. Release No. 33-10570 requires mining companies to make available certain specified information regarding mineral resources and mineral reserves, which would help investors make better decisions. The final rules also bring the SEC’s disclosure requirements for mining companies more in line with industry practices and the Committee for Reserves International Reporting Standards. The final rules will be effective 60 days after being published in the Federal Register,. Read More.
FASB Distinguishes Revenue and Collaborative Arrangements Standards
In its efforts to clarify when collaborative arrangements between companies generate revenue instead of payments between partners, the Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) No. 2018-18— Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. Per the narrow update, when a collaborative participant acts as a customer, the contract should be accounted for under Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. The accounting must include the recognition, measurement, presentation, and disclosure provisions. ASU No. 2018-18 also allows companies to disclose units of account in collaborative arrangements within the. Read More.
FASB Improves Consolidation Guidance for Private Companies
Private companies’ headaches over consolidation accounting have been alleviated with the Financial Accounting Standards Board’s (“FASB”) new Accounting Standards Update (“ASU”). The standard, ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, supersedes the FASB’s 2014 exception that gave private companies the option not to consolidate variable interest entities in common control leasing agreements. The private company exception can now be applied to any qualifying common control agreement. By meeting certain criteria, a private company can make an accounting policy election to forgo applying VIE guidance to legal entities under common control. If a. Read More.
Overnight Index Swap Rate Added to Hedge Accounting Benchmark List
In the latest Accounting Standards Update (“ASU”), the Financial Accounting Standards Board has added the Secured Overnight Financing Rate Overnight Index Swap Rate (“SOFR OIS”) to its list of hedge accounting benchmark interest rates permissible in U.S. GAAP. With ASU No. 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate Overnight Index Swap Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, the SOFR OIS join the London Interbank Offered Rate swap rate, U.S. Treasury debt interest rates, and the OIS founded on the Fed Funds Effective Rate as benchmark rates allowed for hedge accounting.
SEC Asked to Develop Rule on Environmental, Social and Governance Disclosures
In a petition letter to the Securities and Exchange Commission (“SEC”) earlier this month, 50 investor groups and 17 law school professors requested that the agency require environmental, social, and governance (“ESG”) disclosures from public companies. The letter’s authors, law professors Jill Fisch (University of Pennsylvania) and Cynthia Williams (York University in Canada), wrote that the SEC should develop an extensive framework related to ESG matters that help investors become better informed on companies’ long-term performance and risks. According to Fisch and Williams, recent investment studies prove that a good amount of companies’ ESG disclosures are material. A 2017 study. Read More.