AICPA Committee Issues Revised Exposure Draft on Independence Requirements for Governments
The Professional Ethics Executive Committee of the American Institute of Certified Public Accountants (“AICPA”) has issued a revised exposure draft on the independence requirements for state and local governments. Published as Proposed Interpretation: State and Local Government Client Affiliations (formerly Entities Included in State and Local Government Financial Statements) , the exposure draft features significant changes to the original July 2017 proposal, which aims to replace current interpretive guidance in “Entities Included in State and Local Government Financial Statements.” The AICPA is proposing the amendments to address concerns regarding an accountant’s independence on a financial statement attest client that is a state or local government entity. Since existing interpretation does not specify when accountants should review the “Conceptual. Read More.
AICPA Issues Guidance for Implementing Credit Losses Standard
The American Institute of Certified Public Accountants (“AICPA”) has issued a new Audit and Accounting Guide to help banking institutions and insurers implement the Financial Accounting Standards Board’s credit losses standard. Published last week, the guidance highlights key requirements of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. It also describes the Financial Reporting Executive Committee’s (“FinREC”) understanding of customary or sole industry practice regarding certain issues. The guide notes FinREC prefers another practice outside of the customary or sole industry practice. The AICPA said the guide will address implementation issues its. Read More.
FinREC Issues Proposed Guidance for Inventory Fair Value Measurement
The American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) has proposed new guidance for companies when measuring their inventory’s fair value when purchasing or merging with another company. Issued as a working draft on November 19, the proposed guidance is meant for Audit and Valuation Guide: Business Combinations. The working draft features non-authoritative guidance and illustration for estimating the fair value of inventory acquired in a business combination under FASB ASC 820, Fair Value Measurement. The proposed guidance also offers general principles and two examples presenting how companies should value finished goods and inventory considered a work. Read More.
AICPA Committees to Explore Guidance for Digital Currencies
Following similar efforts by the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”), the American Institute of Certified Public Accountants’ (“AICPA”) Auditing Standards Board and Financial Reporting Executive Committee are considering whether to issue accounting and auditing guidance on digital currencies and initial coin offerings. Both committees plan to research the matter and will likely compose a list of financial reporting questions that have appeared concerning digital transactions. Dan Noll, the AICPA director of accounting standards, said the AICPA is considering guidance on digital currencies due to the pervasive nature of the questions being asked on. Read More.
AICPA Issues Working Draft on Multiemployer Benefit Plans
The American Institute of Certified Public Accountants (“AICPA”) wants to add a chapter on multiemployer benefit plans to the Audit and Accounting Guide Employee Benefit Plans. Issued on September 7 as a working draft, the chapter follows Financial Accounting Standards Board (“FASB”) guidance related to multiemployer plans. Such guidance includes FASB ASC 960, Plan Accounting—Defined Benefit Pension Plans, and FASB ASC 960, Plan Accounting—Defined Contribution Pension Plans. Outlined in the draft chapter are the multiemployer plan requirements and how those plans vary from other employee plans. The guidance touches on the overlap among the accounting provisions of multiemployer plans and other retirement. Read More.
FinREC Issues Draft Implementation Guidance for FASB Credit Loss Standard
The American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) has issued the following working drafts on the implementation of Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments: Working Draft: Allowance for Credit Losses Implementation Issue #1: Zero Expected Credit Losses: This working draft offers guidance for situations when a lender may experience no credit loss, even for a defaulted asset. The draft features implementation guidance for applying the zero-loss assumption to instruments like Treasury securities or mortgage bonds supported by the Federal National Mortgage Association. Working Draft: Allowance for. Read More.