Monthly newsletter that briefly describes key regulatory and professional developments that occurred in the field of accounting.
Accounting Roundup — July 2015
In July 2015, there were a number of developments related to the FASB’s and IASB’s joint revenue standard (issued as ASU 2014-09 by the FASB and IFRS 15 by the IASB). The IASB issued a proposal that would clarify certain aspects of IFRS 15, including identifying performance obligations, principal-versus-agent considerations, licensing, and transition. In addition, the FASB and IASB affirmed their proposals to defer the effective date of the revenue standard by one year. Further, the boards’ revenue transition resource group (TRG) held a meeting to discuss nine topics, two of which (portfolio practical expedient and application of variable consideration constraint, completed contracts at transition) are expected to be further considered at a future meeting.
Other significant developments that occurred in July 2015 include the following:
- The FASB issued an ASU requiring entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures, one of which is net realizable value).
- The SEC and four other agencies released a joint staff report that analyzes U.S. Treasury market volatility.
Second Quarter in Review — 2015
The second quarter of 2015 was a productive one for the FASB. The Board made significant progress on its simplification initiative (i.e., the Board’s effort to reduce the cost and complexity of current U.S. GAAP while maintaining or enhancing the usefulness of the related financial statement information) by issuing (1) final ASUs on cloud computing, debt issuance costs, and a practical expedient for measuring retirement benefit plans and (2) proposed ASUs on the accounting for share-based payments, equity method accounting, and the accounting for measurement-period adjustments. In addition, the Board amended certain aspects of the joint FASB-IASB revenue standard, releasing two proposed ASUs that would (1) amend certain portions of the guidance in ASU 2014-09 on performance obligations and licensing and (2) defer the standard’s effective date by one year.
On the international front, the IASB followed the FASB’s lead in issuing an ED that would defer the effective date of its counterpart revenue standard, IFRS 15. The IASB also issued a series of amendments to its IFRS for SMEs as well as proposals that would (1) revise its conceptual framework for financial reporting and (2) make narrow-scope amendments to its pension accounting requirements.
Featuring articles on:
- The FASB’s issuance of two ASUs on (1) disclosures about short-duration insurance contracts and (2) pushdown accounting.
- The FASB’s issuance of two proposed ASUs on (1) simplifying the accounting for measurement-period adjustments and (2) identifying performance obligations and licensing revenue.
- The IASB’s proposal to defer the effective date of IFRS 15, Revenue From Contracts With Customers, by one year.
- The SEC’s issuance of two proposed rules on reporting and disclosure requirements for investment companies and investment advisers.
Featuring articles on:
- The FASB’s proposed ASUs on not-for-profit financial statements and deferring the effective date of the new revenue standard.
- A recent IAASB publication on key audit matters.
- The FAQs published on the regulatory capital rule by the Federal Reserve, OCC, and FDIC.
First quarter in review — 2015
Featuring articles on:
- Decisions and discussions related to the new revenue recognition standard, including:
- The FASB’s tentative decisions to revise the new standard in response to implementation concerns, including deferring the standard’s effective date by one year.
- The January and March meetings of the FASB’s and IASB’s joint revenue transition resource group to discuss various issues raised by stakeholders.
- The EITF’s March 2015 meeting, at which the Task Force reached final consensus on two topics and consensus-for-exposure on three.
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