AccountingLink

    What's new

    Business combinations

    7 February 2018

    Financial Reporting Developments - Business combinations
    We have updated our FRD publication on business combinations to include interpretive guidance on how to apply the recognition and measurement principles in ASC 805 to acquired contracts with customers that are accounted for under ASC 606. Refer to Appendix H of the publication for a summary of the updates.

    29 June 2017

    Financial Reporting Developments - Intangibles - Goodwill and other
    We have updated our Financial reporting developments (FRD) publication on goodwill and intangibles to reflect the guidance in Accounting Standards Update 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, and to clarify and enhance our interpretative guidance. See Appendix D of the publication for a summary of the updates.

    More

    Compensation matters

    18 October 2017

    Financial Reporting Developments - Share-based payment
    We have updated our Financial reporting developments publication on share-based payment to reflect the new guidance in ASU 2017-09, Scope of modification accounting, and to clarify and enhance our interpretative guidance. Refer to Appendix F of the publication for a summary of the updates.

    10 March 2017

    To the Point - Employers’ presentation of defined benefit retirement plan costs will change
    The FASB issued new guidance that will change how employers that sponsor defined benefit pension and/or other postretirement benefit plans present the net periodic benefit cost in the income statement. Employers will present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. Employers will present the other components of the net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. The standard is effective for public business entities for annual periods beginning after 15 December 2017, and interim periods therein. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance.

    More

    Consolidation

    30 November 2017

    Comment Letter - FASB’s proposed consolidation reorganization
    In our comment letter, we support the FASB’s objective of making the consolidation guidance easier to navigate and apply but continue to recommend that the Board pursue the development of a single comprehensive consolidation model. If the FASB moves forward with the proposed ASU, it should provide a concordance, mapping the changes from ASC 810 to ASC 812 and any changes to the original wording. This would make it less costly for companies to implement the proposed changes. Further, we recommend that the Board allow for prospective adoption and that the guidance be effective after all companies adopt ASU 2015-02, ASU 2016-17 and ASU 2017-02.

    26 October 2017

    Financial Reporting Developments - Equity method investments and joint ventures
    Our FRD publication on equity method investments and joint ventures has been updated to reflect the issuance of ASU 2017-05 on accounting for the derecognition of nonfinancial assets and in substance nonfinancial assets and ASU 2016-01 on recognizing and measuring financial instruments. The updated FRD also clarifies and enhances our interpretive guidance. Refer to Appendix C of the publication for a summary of the changes.

    More

    Fair value measurements

    4 October 2017

    Financial Reporting Developments - Fair value measurement
    We have updated our Financial reporting developments publication on fair value measurement to further clarify and enhance our interpretative guidance. Refer to Appendix F of the publication for a summary of the updates.

    29 February 2016

    Comment letter - FASB proposal on fair value measurement disclosures
    In our comment letter, we support both the FASB’s objective to improve the effectiveness of disclosures and the proposed elimination of certain fair value disclosure requirements, including the relief that would be provided to private companies. However, we highlight the cost of implementing some of the additional requirements the FASB proposed, including the disclosures of the amount of changes in unrealized gains and losses for recurring Level 1 and Level 2 measurements disaggregated by class.

    More

    Financial instruments

    23 January 2018

    To the Point - FASB revises proposal to amend new guidance on recognizing and measuring financial instruments
    The FASB tentatively decided to revise its proposal to amend the new guidance on recognizing and measuring financial instruments to require an entity that voluntarily discontinues using the new measurement alternative for an equity security without a readily determinable fair value to measure that security and “all identical or similar investments of the same issuer” at fair value. Entities that make this change would not be permitted to measure subsequent purchases of identical or similar investments of the same issuer under the measurement alternative. The FASB directed the staff to draft a final ASU.

    20 December 2017

    Financial Reporting Developments - Certain investments in debt and equity securities
    We have updated our FRD publication on certain investments in debt and equity securities to include recent standard-setting activity related to premium amortization on callable debt securities. We have also enhanced and clarified our interpretive guidance. Refer to Appendix F of the publication for a summary of the changes.

    More

    Income taxes

    15 February 2018

    To the Point - FASB issues guidance on reclassification from OCI of tax effects related to tax reform
    The FASB issued an Accounting Standards Update that will permit entities to reclassify tax effects stranded in accumulated other comprehensive income (OCI) as a result of tax reform to retained earnings. The final guidance gives entities the option to reclassify these amounts, but requires new disclosures, regardless of whether they elect to do so. The guidance is effective for fiscal years beginning after 15 December 2018, and interim periods within those fiscal years. Early adoption in any period is permitted.

    8 February 2018

    Technical Line - A closer look at accounting for the effects of the Tax Cuts and Jobs Act
    We have updated our Technical Line to incorporate the FASB decision to finalize guidance that would allow entities to reclassify tax effects stranded in OCI by tax reform. We also added discussions of the effect of interest expense deduction limitations on sources of future taxable income and accounting considerations for US Treasury Department and IRS regulations and notices, among other things. This document incorporates our views on SAB 118 and provides additional discussion on other accounting effects of the Act, including the views expressed by the FASB staff on the accounting for certain provisions of the Act. It also addresses the accounting implications for companies with fiscal years that end on a date other than 31 December.

    More

    IFRS matters

    20 October 2016

    US GAAP versus IFRS: The basics
    We have updated our US GAAP versus IFRS – The basics publication, which provides an overview of common differences between US GAAP and IFRS. This release generally reflects guidance effective in 2016 and guidance finalized by the FASB and the IASB as of 31 May 2016. It also discusses current standard-setting activities at the FASB and the IASB.

    20 October 2016

    US GAAP/IFRS accounting differences identifier tool
    We have updated our US GAAP/IFRS accounting differences identifier tool, which was developed to help entities that are converting from US GAAP to IFRS or that are evaluating the effects of IFRS adoption. This release generally reflects guidance effective in 2016 and guidance finalized by the FASB and the IASB as of 31 May 2016. It also discusses current standard-setting activities at the FASB and the IASB.

    More

    Industry issues

    25 January 2018

    Financial Reporting Developments - Accounting for certain life insurance and annuity products
    Our FRD publication, Accounting for certain life insurance and annuity products, has been updated to incorporate and supersede content from our FRD publication, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts. The updated FRD also includes enhanced and clarified interpretive guidance but does not address the FASB’s project on targeted improvements to the accounting for long-duration insurance contracts.

    4 December 2017

    Technical Line - How the new revenue standard affects life sciences entities
    We have updated our Technical Line, How the new revenue standard affects life sciences entities, to include additional factors that life sciences entities should consider when evaluating the effect of termination clauses on contract duration and to reflect the SEC release that updates the Commission’s guidance on accounting for sales of vaccines that are placed in the national stockpile. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    More

    Leases

    5 February 2018

    Comment letter - FASB proposal to add a transition option and practical expedient for lessors to the new leases standard
    In our comment letter, we supported the FASB’s efforts to reduce the cost and complexity of applying the guidance in ASC 842, Leases. However, we believe the Board could provide additional relief by giving entities the option to use an alternative transition method that would allow them to apply the recognition and subsequent measurement guidance in ASC 842 to existing leases at the date of initial application. In addition, we expressed concern that the proposed criteria for use of the lessor practical expedient would inadvertently limit the population of leases to which the practical expedient could be applied.

    25 January 2018

    To the Point - FASB issues transition practical expedient for land easements and clarification on applying ASC 842
    The FASB issued final guidance to provide an optional transition practical expedient for land easements in the new leases standard that permits an entity to continue applying its current policy for accounting for land easements that exist as of or expire before the effective date of ASC 842, Leases. An entity that elects the practical expedient must apply it to all of its existing or expired land easements that it didn’t previously account for under ASC 840.

    More

    Private companies

    10 March 2016

    To the Point - Final guidance eliminates effective dates in PCC alternatives
    The FASB issued final guidance that eliminates the effective dates in the four private company alternatives developed by the Private Company Council (PCC) and allows private companies to forgo a preferability assessment the first time they elect each of these alternatives. It also extends the transition provisions in the alternatives indefinitely.

    Revenue recognition

    4 December 2017

    Technical Line - How the new revenue standard affects life sciences entities
    We have updated our Technical Line, How the new revenue standard affects life sciences entities, to include additional factors that life sciences entities should consider when evaluating the effect of termination clauses on contract duration and to reflect the SEC release that updates the Commission’s guidance on accounting for sales of vaccines that are placed in the national stockpile. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and should be read in conjunction with it.

    20 November 2017

    Technical Line - How the new revenue standard affects midstream oil and gas entities
    Our Technical Line highlights key implications of the new revenue standard for midstream oil and gas entities. This publication supplements our Financial reporting developments publication, Revenue from contracts with customers (ASC 606) , and should be read in conjunction with it.

    More

    SEC/Other regulators

    11 January 2018

    SEC in Focus - January 2018
    Our latest newsletter summarizes SEC developments in the last quarter, including certain items we have not previously reported in Week in Review. Highlights include SEC staff guidance on tax reform, remarks by SEC Chairman Jay Clayton and members of the SEC staff at the recent AICPA Conference on Current SEC and PCAOB Developments on the new accounting standards, critical audit matters and cybersecurity, and a discussion of Mr. Clayton’s concerns about initial coin offerings. We also discuss recent SEC rulemaking activities, SEC staff guidance updates and significant personnel changes.

    4 January 2018

    Technical Line - SEC staff provides guidance on accounting for the effects of US tax reform
    The SEC staff issued Staff Accounting Bulletin (SAB) 118 and Compliance and Disclosure Interpretation 110.02 addressing US tax reform, which was enacted on 22 December 2017. This SAB clarifies how companies that haven’t completed their accounting for the effects of the most significant change in US tax legislation in the last 30 years by their financial reporting deadlines should apply ASC 740. Under the SAB, a company can report provisional amounts based on reasonable estimates for items for which the accounting is incomplete. A company that cannot make a reasonable estimate of an item for which the accounting is incomplete should not account for that effect until it can make such an estimate. Those amounts will be subject to adjustment during a measurement period of up to one year.

    More

    Periodic updates

    22 January 2018

    2017 Standard Setter Update - Financial reporting and accounting developments
    Our 2017 Standard Setter Update highlights significant developments in financial reporting and accounting between 1 January and 31 December 2017.

    19 January 2018

    EITF Update - January 2018
    The EITF reached a consensus-for-exposure on customer’s accounting for implementation, setup, and other upfront costs (implementation costs) incurred in a cloud computing arrangement that is considered a service contract.

    More

    More topics

    29 January 2018

    Guide to preparing carve-out financial statements
    When a company is planning to divest all or a portion of a business, financial statements reflecting the operations to be divested may be needed to comply with regulatory requirements, to enable the seller and the buyer to evaluate the potential transaction or to obtain financing. In practice, such financial statements are often referred to as carve-out financial statements. Our publication provides accounting and reporting guidance to help companies prepare carve-out financial statements.

    28 December 2017

    Financial Reporting Developments - Asset retirement obligations
    We have updated our Financial reporting developments publication on asset retirement obligations to further clarify and enhance our interpretative guidance. Refer to Appendix E of the publication for a summary of the updates.

    More