Accounting Roundup has been saved
Quarterly newsletter that briefly describes key regulatory and professional developments that occurred in the field of accounting.
Year in Review — 2019
Notable standards issued by the FASB in 2019 include Accounting
Standards Updates that:
- Change some effective dates for certain new accounting standards, including those on hedging, leases, credit losses, goodwill impairment testing, and long-duration insurance contracts.
- Revise certain aspects of the FASB’s new credit losses standard.
- Clarify certain aspects of the accounting for credit losses, hedging activities, and financial instruments.
- Make Codification improvements to the Board’s new leasing standard.
- Clarify the accounting for share-based payments issued as sales incentives to customers.
- Extend certain private-company alternatives to not-for-profit entities.
On the regulatory front, SEC Chairman Jay Clayton announced that the Commission advanced 34 of the 39 rules on its near-term agenda in 2019 (as of December 10, 2019). Noteworthy SEC publications in 2019 include:
- Final rules that modernize and simplify certain disclosure requirements in Regulation S-K and amend the capital, margin, and segregation requirements for security-based swap dealers and broker-dealers.
- A statement that highlights risks for entities to consider as they transition away from the London Interbank Offered Rate.
- Proposed rules that would amend disclosures for acquisitions or dispositions of businesses and the definitions of accelerated filer and large accelerated filer.
Third Quarter — 2019
Key developments addressed in this issue include the following:
- The FASB’s issuance of proposed ASUs on:
- Simplifying the balance sheet classification of debt.
- Simplifying the issuer’s accounting for convertible instruments and contracts on an entity’s own equity.
- Delaying the effective dates of certain major accounting standards for private companies, not-for-profit entities, and certain small public companies.
- The interaction between the FASB’s standard on the equity method and that on financial instruments.
- Deferring the effective date of the Board’s standard on long-duration insurance contracts.
- The effects of reference rate reform.
- The SEC’s release of (1) a statement on the expected discontinuation of London Interbank Offered Rate (LIBOR) use in 2021 and how the transition from LIBOR may significantly affect financial markets and market participants and (2) a proposed rule on modernizing certain disclosure requirements in Regulation S-K.
- The International Accounting Standards Board’s issuance of amendments related to interest rate benchmark reform as well as two exposure drafts of proposed amendments that would (1) improve disclosures about accounting policies and (2) clarify the accounting for deferred taxes on leases and decommissioning obligations.
Second Quarter — 2019
This issue discusses notable accounting and financial reporting developments that occurred in the second quarter of 2019, including:
- The FASB’s issuance of (1) Accounting Standards Updates (ASUs) that provide targeted relief for entities adopting the Board’s credit losses standard, amend certain aspects of financial instrument accounting, and extend certain private-company accounting alternatives to not-for-profit entities and (2) proposed ASUs that would improve certain aspects of the FASB’s credit losses guidance, align certain FASB Codification guidance with SEC requirements, and simplify income tax accounting.
- The SEC’s release of proposed rules that would amend (1) the financial statement requirements for acquisitions and dispositions of businesses, including real estate operations, and related pro forma financial information and (2) the definitions of “accelerated filer” and “large accelerated filer” to exclude any issuer with both annual revenues of less than $100 million and public float of less than $700 million.
- The IASB’s® publication of exposure drafts of proposals that would amend (1) IFRS 17, Insurance Contracts, to address implementation concerns and challenges; (2) certain guidance in IFRS 3, Business Combinations, to bring it up to date with the 2018 version of the IASB’s Conceptual Framework; (3) certain IFRS® Standards as part of the IASB’s annual improvements process; and (4) guidance on financial instruments in response to interest rate benchmark reforms.
First Quarter — 2019
In the first quarter of 2019, the FASB issued the following final and proposed guidance:
- Final Accounting Standards Updates (ASUs) that (1) enhance the accounting for costs associated with episodic television series, (2) make Codification improvements to the new leasing standard, and (3) update the definition of “collections.”
- Proposed ASUs that would (1) provide guidance on recognizing and measuring deferred revenue in a business combination, (2) ease transition to the Board’s new credit losses standard, (3) address the accounting for share-based payments issued as sales incentives to customers, and (4) improve the income tax disclosure requirements in U.S. GAAP.
In other notable news, the SEC issued a final rule in response to recommendations in the SEC staff’s Report on Modernization and Simplification of Regulation S-K. The final rule makes specific revisions to a limited group of items in Regulation S-K and is intended to streamline and improve disclosures. In addition, the PCAOB released a new standard on auditing accounting estimates as well as amendments to its auditing standards on the auditor’s use of the work of specialists.
Year in Review — 2018
Key developments that occurred in 2018 included the following:
- The FASB’s release of ASUs on (1) cloud computing, (2) collaborative arrangements, (3) the related-party guidance for variable interest entities, (4) narrow-scope amendments to the guidance on credit losses, (5) disclosure effectiveness, (6) long-duration insurance contracts, and (7) contributions received and made.
- The SEC’s continuing focus on (1) cybersecurity, including its issuance of an interpretive release and investigative report on this topic, and (2) disclosure effectiveness, including its publication of a final rule that amends certain outdated and redundant disclosure requirements and a proposed rule that would simplify and streamline financial disclosures about guarantors and issuers of guaranteed securities and affiliates whose securities collateralize a registrant’s securities.
- The International Accounting Standards Board’s (1) revision of its conceptual framework for financial reporting and (2) publication of amendments to enhance the definition of a business and revise the definition of materiality.