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FASB to Delay Amended Income Tax Guidance

The Financial Accounting Standards Board (“FASB”) is taking a wait-and-see approach before finalizing its income tax disclosure guidance. An FASB spokesperson said the board wants to await the outcome of Congress and the Trump administration’s income tax reform legislation prior to approving Proposed Accounting Standards Update No. 2016-270, Income Taxes (Topic 740): Disclosure Framework — Changes to the Disclosure Requirements for Income Taxes. The move is to ensure the FASB’s proposed amendments to income tax disclosures stay relevant. The FASB also plans to hold off on making additional changes to the guidance under Topic 740, Income Taxes. The FASB spokesperson. Read More.

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FASB Continues Discussions on Disclosure Framework Project

During a discussion at last Wednesday’s meeting, the Financial Accounting Standards Board (“FASB”) made the following decisions on proposed FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8, Notes to Financial Statements: Nonprofits and private companies must be retained on the notes to financial statements. A discussion on the possible negative consequences of disclosures will be included. The disclosure of changes in line items not easily understood will be considered. The disclosure of alternative measures clearly useful in reviewing prospects for future cash flows will be considered. No disclosure objectives were established without giving specific requirements on how those objectives. Read More.

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Highlights from the Private Company Council’s Tuesday Meeting

The following is a recap of Financial Accounting Standards Board (“FASB”) projects discussed at Tuesday’s Private Company Council (“PCC”) meeting: Disclosure Framework. Numerous PCC members expressed support for the project, particularly the inventory exposure draft. The PCC also provided feedback on various portions of the project. Financial instruments—Hedge Accounting. Many PCC members favor the standard, including guidance to give private companies additional time to disclose hedge effectiveness. Liabilities and Equity—Targeted Improvements. Feedback received on the Exposure Draft was discussed, as well as the FASB’s research on an alternative to help streamline financial instruments accounting with “down round” features. The FASB was encouraged. Read More.

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FASB Proposes Changes to Balance Sheet Debt Classification and Inventory Disclosures

In a January 10 news release , the Financial Accounting Standards Board (“FASB”) announced the issuance of two proposed Accounting Standards Updates impacting the balance sheet classification of debt and the inventory disclosure requirements under the Disclosure Framework project. Classification of Debt on a Balance Sheet: The FASB proposes simplifying the current debt classification guidance with an all-encompassing, consistent principle that addresses a borrower’s contractual rights and responsibilities. The proposed changes could create a shift in how some debt arrangements among noncurrent liabilities and current liabilities are classified. Comments on the proposal are due Friday, May 5. Disclosure Framework—Inventory: The FASB wants companies to. Read More.

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FASB Reaches Decisions on Inventory Disclosures

During a September 19 discussion on inventory disclosures as part of its Disclosure Framework project, the Financial Accounting Standards Board (“FASB”) agreed that companies must disclose the following in annual financial statements: Inventory separated by component Inventory separated by measurement basis Inventory balance changes that are not particularly associated with the purchase, manufacture, or sale of inventory in the regular course of business A qualitative explanation of the costs capitalized into inventory The impact of last-in, first-out (“LIFO”) liquidations on income The replacement cost for LIFO inventory Inventory, by reportable segment or component for each reportable segment, if the information. Read More.

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Additional Income Tax Disclosures Proposed

The Financial Accounting Standards Board (“FASB”) wants to increase the disclosure requirements for income taxes. In its Proposed Accounting Standards Update, Income Taxes (Topic 740): Disclosure Framework – Changes to the Disclosure Requirements for Income Taxes, the FASB recommends all entities add the following disclosures: An explanation of a tax law amendment that is likely to impact the entity in a later period. Income or losses from ongoing operations previous to income tax expenses or benefits separated between domestic and foreign. Income tax expenses or benefits from ongoing operations separated between domestic and foreign. Income taxes paid separated between domestic. Read More.

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