FASB to Review Backwards Tracing Related to Tax Reform
The Financial Accounting Standards Board’s (“FASB”) research team plans to review how the tax code changes stemming from the Tax Cuts and Jobs Act (“TCJA”) will impact backwards tracing, which is a practice U.S. GAAP currently prohibits. Backwards tracing is a practice in which the impact of a change in a deferred tax credit or charge is included in the same line item wherein the deferred taxes were initially recorded. According to FASB staff member Jason Bond, the board wants to review the costs of backwards tracing and consider alternatives to determine whether the benefits outweigh the costs. Bond remarked. Read More.
FASB to Align Materiality Definition with Other Organizations
The Financial Accounting Standards Board (“FASB”) has finalized a two-part plan that involves returning to an older definition of “materiality.” At its March 21 meeting, the board agreed to use the materiality definition stated in Statement of Financial Accounting Concepts (“CON”) No. 2, Qualitative Characteristics of Accounting Information, and add an internal guide to its Concepts Statements to help produce consistent requirements for new U.S. GAAP disclosures. According to the FASB, the concept of materiality under CON No. 2 aligns with the Securities and Exchange Commission, the Public Company Accounting Oversight Board, and the American Institute of Certified Public Accountants. Also. Read More.
Topics: AICPA, American Institute of Certified Public Accountants "AICPA", FASB, Financial Accounting Standards Board "FASB", materiality, Notes to Financial Statements (Topic 235), PCAOB, Proposed Account, Public Company Accounting Oversight Board "PCAOB", Securities and Exchange Commission "SEC", Statements of Financial Accounting Concepts
SEC Approves 2018 GAAP Financial Reporting Taxonomy
Announced in a press release by the Financial Accounting Standards Board (“FASB”), the Securities and Exchange Commission (“SEC”) has accepted the 2018 GAAP Financial Reporting Taxonomy. This year’s edition features accounting standards updates and other suggested improvements. The market regulator has also accepted the 2018 SEC Reporting Taxonomy (“SRT”). A new edition this year, the SRT covers the essentials needed to meet provisions for SEC-required financial schedules, condensed consolidating financial information for guarantors, and disclosures regarding oil- and gas-producing activities. FASB staff will discuss the 2018 GAAP Financial Reporting Taxonomy and SRT tomorrow during its live webcast . The event will start at 1:00 pm. ET.
Simplified Transition Method to FASB Lease Standard Approved
At its March 7 meeting, the Financial Accounting Standards Board (“FASB”) agreed to offer companies an easier method for transitioning to its lease standard. When adopting Accounting Standards Codification 842, Leases, companies will be able to recognize the cumulative impact of the standard as a change to the starting balance of their retained earnings. Previous guidance required companies to disclose the last two years of comparative results. Harold Schroeder was the lone FASB member to reject the streamlined transition method. Schroeder once stated that allowing companies to avoid retrospectively adopting the new standard would not clarify a company’s financial position. Read More.
FASB Could Align Definition of a Collection with U.S. GAAP
When the Financial Accounting Standards Board (“FASB”) meets tomorrow, board members may align U.S. GAAP’s definition for “collection” with the American Alliance of Museums’ (“AAM”) definition. The decision would address museums’ struggles with determining the value of art collections and artifacts in complying with the AAM’s policies since the organization grants museum accreditations. Museums also seek GAAP-compliant statements. To be considered a collection, artwork and historical treasures must be used for public exhibition, education, or research for public service and not financial gain; protected, cared for, and preserved; and bound by a policy requiring that the sales proceeds be used. Read More.
FASB to Curtail Fair Value Disclosure Requirements
The Financial Accounting Standards Board (“FASB”) has finalized amendments that would prevent companies from disclosing irrelevant and unnecessary information on financial statement footnotes related to how they measure the fair value of select assets and liabilities. Decided at the FASB’s March 7 meeting, the amendments will be based on Proposed Accounting Standards Update No. 2015-350, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The FASB believes the changes will lower costs for companies and improve disclosures for investors and analysts. Companies will have to adopt the amended disclosure requirements for fiscal. Read More.