Upcoming FASB Proposal Offers Simplified Goodwill Impairment Test
In late March, the Financial Accounting Standards Board (“FASB”) is expected to release a proposal that shortens the goodwill impairment test public companies perform after an acquisition. The upcoming proposal would eliminate the second part of the two-step impairment test that calculates the decreased value amount of acquired goodwill. A one-step process would bring U.S. GAAP more in line with International Financial Reporting Standards and address complaints that the calculation of goodwill impairment is an expensive and unnecessary process. The FASB wants to issue the proposal for a comment period of 60 days.
Will New Revenue Standards on Customer Contracts Impact You?
By: Sara Crabtree , Manager, Government Contractor Services Group U.S. Generally Accepted Accounting Principles (GAAP), as codified in the Accounting Standards Codification, does not provide one, all-inclusive general standard on revenue recognition that applies across the board to all transactions and entities. Companies follow various subtopics in the Codification or industry specific standards to determine the proper procedures for recognizing revenue. That will all change for contracts with customers once new revenue recognition standards go into effect. In May 2014, the International Accounting Standards Board (“IASB”) and Financial Accounting Standards Board (“FASB”) issued new requirements on recognizing revenue that derives from customer-based. Read More.
Topics: Accounting Standards Codification, Accounting Standards Update "ASU", Financial Accounting Standards Board "FASB", International Accounting Standards Board "IASB", International Financial Reporting Standards "IFRS", Topic 606, U.S. GAAP
FASB Financial Instruments Standard Issued
After spending the past decade working to simplify the accounting for financial instruments, the Financial Accounting Standards Board (“FASB”) has issued its long-anticipated guidance, Accounting Standards Update (ASU) No. 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. FASB Chairman Russell Golden said the new standard will provide more useful information to financial statement users, and improves the accounting model to better address economic complexities. When the project initially started, the FASB attempted to overhaul the accounting for financial instruments. Things took a turn after the 2008 financial crisis, and the final standard. Read More.
FASAC Members Want More Transparency on Non-GAAP Measures
During talks last month on possible uniform non-GAAP measures in companies’ financial statements, several members of the Financial Accounting Standards Board’s (“FASB”) Financial Accounting Standards Advisory Council (“FASAC”) advocated requiring companies to provide more details about their non-standard earnings metrics. Indiana University professor Patrick Hopkins acknowledged that some non-GAAP measures allow companies to disclose industry-specific information not reflected in accounting standards. He also argued that if the FASB or Securities and Exchange Commission required more transparency regarding how measures are defined, investors and analysts could better understand the information. Supporting Hopkins’ call for increased transparency was Douglas Oare, managing director. Read More.
U.S. GAAP Update to Offer Accounting Alternative for Private Companies
Last month, the Financial Accounting Standard Board (“FASB”) approved a proposal that would offer private companies an easier method to adopt special accounting alternatives from U.S. GAAP. Scheduled to be published in early 2016, the proposal is in response to the Private Company Council’s (“PCC”) calls for accounting changes. In September, the FASB issued Proposed Accounting Standards Update No. PCC-15-01, Intangibles—Goodwill and Other (Topic 350): Business Combinations (Topic 805): Consolidation (Topic 810): Derivatives and Hedging (Topic 815): Effective Date and Transition Guidance — a Proposal of the Private Company Council. The proposal eliminates the effective dates for the following accounting. Read More.
Topics: Accounting Standards Update "ASU", Business Combinations (Topic 805), Derivatives and Hedging (Topic 815), Financial Accounting Standards Board "FASB", Private Company Council "PCC", U.S. GAAP
PCC Slams Income Tax Disclosure Plan
At its December 4th meeting, the Private Company Council (“PCC”) criticized the Financial Accounting Standards Board’s (“FASB”) proposal to add effective disclosures to Accounting Standards Codification 740-10-50, Income Taxes. The plan would require additional details about income taxes to be disclosed in the footnotes of a company’s financial statements. Members of the FASB’s advisory group, however, said that the extra details would be a burden on private companies and worthless to most financial statement users. In particular, PCC members slammed the requirement for companies to disclose the reconciliation of its effective tax rate and statutory rate. While U.S. GAAP requires public companies to. Read More.