Monthly newsletter that briefly describes key regulatory and professional developments that occurred in the field of accounting.
First Quarter in Review — 2016
The first quarter of 2016 was a busy one for the FASB. The Board issued its long-awaited standard on accounting for leases, ASU 2016-02, which introduces a lessee model that brings most leases on the balance sheet and aligns many of the underlying principles of the new lessor model with those in ASU 2014-09, the FASB’s new revenue recognition standard. The FASB also released:
- An ASU that amends the guidance in U.S. GAAP on the classification and measurement of financial instruments.
- An ASU that clarifies the principal-versus-agent guidance in the Board’s new revenue standard.
- An ASU that changes the effective date and transition guidance in certain private-company ASUs.
- An ASU that simplifies the accounting for share-based payments.
- An ASU that simplifies the equity method of accounting.
- Three ASUs based on EITF consensuses.
- Two proposed ASUs related to employee benefit plans.
- A proposed ASU on certain cash flow classification issues.
In other news, at the 12th annual Life Sciences Accounting and Reporting Congress in Philadelphia, SEC Chief Accountant James Schnurr gave a speech in which he indicated that the SEC staff has observed “a significant and, in some respects, troubling increase . . . in the use of, and nature of adjustments within, non-GAAP measures“ as well as their prominence. Mr. Schnurr commented that non-GAAP measures are intended to “supplement . . . and not supplant“ the information in the financial statements.
On the international front, the IASB issued its own leasing standard, IFRS 16, which brings most leases on the balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Although the FASB’s and IASB’s leases project was a convergence effort and the boards conducted joint deliberations, the IASB’s standard differs from the FASB’s in several notable ways. For instance, the IASB’s standard has a single lessee accounting model while the FASB’s has a dual lessee accounting model.
Highlights of the February 2016 edition of Accounting Roundup include the following:
- The FASB’s release of ASU 2016-02, its new standard on accounting for leases.
- The SEC staff’s remarks on implementation issues associated with the FASB’s and IASB’s new revenue standard.
- The SEC’s release of a final rule on cross-border security-based swaps and a proposed rule on covered broker-dealer provisions.
Highlights of the January 2016 edition of Accounting Roundup include the following:
- The FASB’s release of (1) a final ASU on classification and measurement of financial instruments, (2) a proposed ASU on certain cash flow classification issues, and (3) two proposals related to employee benefit plans.
- The IASB’s publication of (1) its new leasing standard, IFRS 16; (2) amendments to the guidance on income taxes in IAS 12; and (3) amendments to the guidance on cash flow disclosures in IAS 7.
- Adoption and transition observations related to the FASB’s and IASB’s new revenue standard.
- The SEC’s release of guidance related to the FAST Act.
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