Codification Improvements to FASB Leases Standard Proposed
The Financial Accounting Standards Board has announced proposed amendments to its leases standard concerning possible lessor implementation issues related to Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The proposed changes would align the FASB’s guidance for fair value of the underlying asset by lessors not considered manufacturers or dealers under Topic 842, with existing guidance. Thus, the fair value of the underlying asset at the start of the lease is its cost, and it would incorporate any applicable volume or trade discounts. If significant time has lapsed since the acquisition of the underlying asset and when the lease starts, however,. Read More.
FASB Proposes Extending Goodwill and Identifiable Intangibles Alternatives to Nonprofits
A recently proposed Accounting Standards Update (“ASU”) aims to help nonprofits account for goodwill and calculate certain identifiable intangible assets. Proposed ASU No. 2018-320, Intangibles-Goodwill and Other (Topic 350), Business Combinations (Topic 805), and Not-for-Profit Entities (Topic 958): Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities, extends an accounting alternative from the Private Company Council that allows nonprofits to amortize goodwill over 10 years or less on a straight-line basis. Nonprofits could also use the accounting alternative to test for impairment upon a triggering event, opt for an impairment test at the. Read More.
FASB Proposes Slight Updates to Three Major Accounting Standards
Multiple clarifications are in the works for three of the Financial Accounting Standards Board’s (“FASB”) top accounting standards. On November 19, the FASB issued a proposal featuring changes to the following Accounting Standards Updates (“ASU”): ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The proposal features 11 changes to the credit loss standard. The proposed clarifications include how companies calculate the allowance for credit losses on accrued interest receivable balances and accounting for the allowance when moving debt securities between measurement categories. Also proposed are clarifications regarding when a company must. Read More.
Credit Loss Standard Effective Date Delayed for Community Banks and Credit Unions
An upcoming clarification to the Financial Accounting Standards Board’s (“FASB”) credit loss standard ensures that credit unions and small banks will get an extra year to implement Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326). By a unanimous vote on October 24, the FASB confirmed several amendments under Proposed ASU No. 2018-270, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The proposed changes include merging the implementation dates for private companies’ annual financial statements and their interim financial statements. Private companies must apply the standard for fiscal years, as well as interim periods within such years, starting. Read More.
FASB to Clarify Collaborative Arrangements Guidance
Pharmaceutical and biotechnology companies that set up joint ventures to develop drugs will receive new accounting guidance soon. In a unanimous decision on July 26, the Financial Accounting Standards Board (“FASB”) agreed to finalize a small change to U.S. GAAP that would help companies account for transactions in collaborative arrangements as revenue. The FASB hopes the update will help companies follow the revenue guidance under Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers. Likely to be issued before year’s end, the update will reflect guidance under Proposed Accounting Standards Update (“ASU”) No. 2018-240, Collaborative Arrangements (Topic 808): Targeted Improvement. The. Read More.
Insurers Seek Extension of Insurance Standard’s Effective Date
Principal Financial Group and the American Council of Life Insurers want the Financial Accounting Standards Board (“FASB”) to delay the effective date of its proposed insurance standard by at least one year. In separate letters to the FASB, the insurance companies argue a lack of resources and the need to overhaul existing systems will prevent them and other insurers from implementing the accounting changes before the projected 2021 effective date for public companies. The FASB is currently reviewing the delay request. In the meantime, the board is targeting an August release for its final amendments to guidance concerning insurance company-issued long duration contracts . Based on a proposed Accounting Standards. Read More.