Monthly newsletter that briefly describes key regulatory and professional developments that occurred in the field of accounting.
Highlights of the January 2017 edition of Accounting Roundup include the following:
- The FASB’s issuance of (1) ASUs that clarify the definition of a business, amend the consolidation guidance for not-for-profit entities, simplify the goodwill impairment test, make technical corrections to the new revenue standard, and amend certain SEC guidance and (2) proposed ASUs that would simplify the balance sheet classification of debt and update the inventory disclosure requirements.
- The release of FAQs on the FASB’s credit losses standard, ASU 2016-13, by several banking agencies.
- Public statements by the SEC’s acting chairman, Michael Piwowar, regarding the Commission’s 2014 guidance on its August 2012 final rule on conflict minerals.
Year in Review — 2016
Key developments that occurred in 2016 included the following:
- The FASB’s release of its much-anticipated standards on leases and credit losses as well as several ASUs on implementation issues associated with its new revenue standard.
- The SEC’s increased focus on non-GAAP measures and continued work on its disclosure initiative.
- The IASB’s issuance of its new leases standard as well as amendments to its revenue and insurance contracts standards.
- The United Kingdom’s vote to leave the European Union in a June 23, 2016, referendum (the "Brexit vote") and the resulting financial reporting implications.
Highlights of this issue include the following:
- The FASB’s issuance of an ASU on restricted cash and proposed ASUs on (1) determining the customer of operation services in service concession arrangements and (2) amending the scope of modification accounting for share-based payment arrangements.
- The AICPA’s release of revenue working drafts for broker-dealers and depository and lending institutions.
- The SEC’s issuance of a report on the modernization and simplification of Regulation S-K.
Highlights of the October 2016 edition include the following:
- The FASB’s issuance of (1) an ASU amending the consolidation guidance on entities that are under common control, (2) an ASU on simplifying the accounting for intra-entity asset transfers, and (3) a proposed ASU containing a technical correction to its guidance on financial statement presentation for not-for-profit entities.
- The AICPA’s release of a new SSARS that expands the applicability of standards related to preparation and compilation of financial information.
- The SEC’s recent decision to no longer require registrants to provide “Tandy” representations in their disclosures related to SEC comment-letter correspondence.
Third Quarter in Review — 2016
In the third quarter of 2016, the FASB released a number of proposed and final standards. In addition to issuing two final Accounting Standards Updates (ASUs) — on (1) simplification of a not-for-profit entity’s (NFP’s) financial statements and (2) classification of certain cash receipts and cash payments in the statement of cash flows — the Board issued proposed ASUs that would amend its guidance on the following topics:
- Long-duration insurance contracts.
- The amortization period for callable debt securities purchased at a premium.
- Employee benefit plans.
- Hedge accounting.
- The income tax disclosure requirements.
- The consolidation guidance for NFPs.
- Technical corrections and improvements to the Board’s new revenue standard, ASU 2014-09.
In addition, the FASB published for public comment an (1) invitation to comment that requests stakeholder feedback on which financial accounting and reporting topics should be added to the FASB’s agenda and (2) exposure draft of a proposed concepts statement that would add a new chapter (Chapter 7) on presentation of financial information to the Board’s conceptual framework for financial reporting.
In other news, in recent speeches, the SEC staff has reminded registrants about best practices to follow in the periods leading up to the adoption of ASU 2014-09 (on revenue), ASU 2016-02 (on leases), and ASU 2016-13 (on credit losses). The staff’s comments, which reiterated themes it has addressed over the past year, focused on internal controls over financial reporting, auditor independence, and disclosures related to implementation activities.
On the international front, the IASB recently published amendments to its insurance contracts standard, IFRS 4. The amendments address concerns about the different effective dates of IFRS 9 and the IASB’s forthcoming insurance contracts standard, which is expected to be issued as IFRS 17 in March 2017.