Accounting & reporting
Keep up to date on the most recent financial accounting and reporting developments
Point of view
Consolidation - A single model would enhance information reported to investors
5/6/13 | Assurance servicesWebcast
Register now for the Q2 2013 Current Accounting and Reporting Developments webcast on June 19th
6/19/2013 | Assurance services
Dataline
4/17/2013 | Assurance services
Accounting guides
In-depth accounting guidance for topics of significant interest.
9/17/2012 | Assurance servicesAccounting guides
Global Guide to Accounting for Business Combinations and Noncontrolling Interests - 2013 edition5/23/13 | Assurance services
This PwC guide explains the fundamental principles of accounting and reporting for business combinations and noncontrolling interests under both U.S. GAAP and IFRS. This guide also includes our perspectives on the application of those principles, as well as our insights on the challenges of accounting for intangible assets and goodwill in the postacquisition period.
In brief
In brief: FASB will issue an exposure draft of an insurance contracts standard (No. 2013-27)5/23/13 | Assurance services
FASB voted on May 23, 2013 to issue an exposure draft on insurance contracts that could fundamentally change earnings and revenue patterns for insurers and some banks.
Flashline
Flashline - Week ending May 16, 2013 (No. 2013-20)5/17/13 | Assurance services
PwC's weekly update on financial reporting. This week's topics include: Inaugural edition of "Private company reporter — A PCC meeting synopsis"... Dataline: Cumulative translation adjustment — A compromise to achieve consistency... Register for PwC's Leasing Webcast Series — May 29 & June 11... and more.
Webcast
Accounting methods considerations for M&A transactions webcast – June 12, 2013Washington national tax services (WNTS)
Members of PwC's Washington National Tax practice will lead an hour-long webcast that includes a discussion of common M&A transactions and the potential accounting method considerations that may result.
Dataline
Dataline: Cumulative translation adjustment – A compromise to achieve consistency (No. 2013-10)5/16/13 | Assurance services
On March 5, 2013 the FASB issued ASU No. 2013-05, which amends ASC 830, Foreign Currency Matters, and ASC 810, Consolidation,to address diversity in practice related to the release of cumulative translation adjustments ("CTA") into earnings upon the occurrence of certain derecognition events. This Dataline provides an overview of the ASU.
Private company reporter
Private company reporter (May 7, 2013 meeting)5/16/13 | Assurance services
At its May meeting, the PCC approved alternatives in the areas of business combinations and interest rate swaps which are now subject to endorsement by the FASB.
In brief
In brief: FASB and IASB publish revised exposure draft on leases (No. 2013-26)5/16/13 | Assurance services
The FASB and IASB issued a revised exposure draft on leases on May 16, 2013 with a comment period ending September 13, 2013. Almost all entities will be impacted. This In brief article provides an overview of the revised proposal.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Financial Instruments—Overall (Subtopic 825-10)—Recognition and Measurement of Financial Assets and Financial Liabilities and the Proposed Amendments to the FASB Accounting Standards Codification5/15/13 | Assurance services
PwC supports the FASB’s proposed comprehensive framework for classifying financial instruments, which is not dependent on legal form. We agree that the primary drivers for how financial assets are classified and measured should be a company's business model for managing its financial assets, as well as the cash flow characteristics of the instruments. The accounting model should faithfully portray the economic consequences of transactions in the context of a company's business strategies and the nature of those financial instruments.
Webcast
Leasing webcast: Impacts and Action Items – June 11, 2013Addressing the proposed changes to lease accounting will be a challenge for most companies. This webcast will discuss how management can prepare for the changes in a measured way and some of the actions that companies are taking now to prepare.
Webcast
Leasing webcast: Overview of the Proposed Guidance – May 29, 2013Almost three years have passed since the IASB and FASB (the "Boards") issued their initial proposal. After extensive outreach and re-deliberation, the Boards will be issuing a new proposal. This webcast will discuss an overview of the proposed guidance and the nuances that might lead to unexpected financial results.
Webcast
Navigating the tax and accounting considerations of the patent box and other global technology incentives – May 30, 2013Tax accounting services
PwC invites you to join a panel of our Tax Accounting Services (TAS) and Washington National Tax Services (WNTS) specialists for a dialogue around the tax and accounting considerations related to global incentives for research and technology investments.
- The importance of being financially bilingual
5/13/13 | US Capital Markets and Accounting Advisory Services
When conducting cross border deals, it is important to Identify potential financial reporting differences to maximize deal value and for understanding how financial reporting and regulatory requirements interact. Embedding GAAP changes and managing multi-GAAP reporting post-acquisition requires planning.
Flashline
Flashline - Week ending May 9, 2013 (No. 2013-19)5/9/13 | Assurance services
PwC's weekly update on financial reporting. This week's topics include: 10Minutes on conflict minerals... Point of view: Consolidation—A single model would enhance information reported to investors... FASB proposes amendments to Codification glossary terms... and more.
In brief
In brief: PCAOB reproposes related parties auditing standard and related amendments (No. 2013-25)5/9/13 | Assurance services
The PCAOB reproposed a related parties auditing standard and amendments on significant unusual transactions and financial relationships with executive officers. This In brief article provides an overview of the key aspects of the reproposal.
Webcast
Global Compensation Management: Oxymoron or Possibility? webcast – June 4, 2013International assignment services
Please join PwC's International Assignment Services practice for an engaging conversation on global compensation management.
In brief
In brief: FASB proposes amendments to Codification glossary terms (No. 2013-24)5/7/13 | Assurance services
On May 6, 2013, the FASB released an exposure draft proposing technical corrections and improvements to the FASB Accounting Standards Codification (the Codification). The proposal is part of the FASB's ongoing project to improve the Codification. This set of proposed changes is focused on improving the Codification’s master glossary. The proposed amendments are not intended to change U.S. GAAP. Instead, they are aimed at making the glossary easier to understand and reducing the number of glossary terms. This In brief article provides an overview of the proposal.
Point of view
Point of view: Consolidation - A single model would enhance information reported to investors5/6/13 | Assurance services
This Point of view highlights that a single definition of control leading to one consolidation model in the U.S. would benefit all stakeholders.
Webcast
Q2 2013 Current Accounting and Reporting Developments webcast - June 19, 2013Assurance services
Hosted by PwC's National Professional Services Group, these quarterly webcasts are designed to keep you informed about emerging accounting, regulatory, and market developments impacting financial reporting. Please join us on Wednesday, June 19 at 1:00pm ET for this 90 minute webcast featuring insights from a broad range of PwC specialists who will update you on current technical topics and emerging issues that may impact your business.
IFRS news
IFRS news - May 20135/6/13 | Assurance services
PwC's monthly report shedding light on the IASB's activities. This edition looks at (1) integrated reporting - IIRC publishes consultation draft, (2) levies - IC to issue interpretation on accounting for levies, (3) insurers face change - update on the insurance contract, (4) recent activity at the IASB on ED on interim standard for regulatory deferral accounts, new Chairman of FASB, EU endorsement of amendments to IFRS 10, 11 and 12, and (5) know your IFRS 'ABC': ‘F’ for fair value.
In brief
In brief: FASB proposes to defer quantitative disclosures for nonpublic employee benefit plans (No. 2013-23)5/2/13 | Assurance services
On April 30, 2013, the FASB issued a proposal that would indefinitely defer for nonpublic employee benefit plans certain quantitative fair value disclosures for investments in their plan sponsors' nonpublic entity equity securities. Comments on the FASB's exposure draft are due May 31, 2013. This In brief article provides an overview the FASB's proposal.
Webcast
Hot topics and technical updates impacting accounting and financial reporting webcast – May 2, 2013Healthcare
The next installment in PwC's Healthcare, Higher Education and Not-for-Profit quarterly webcast series provides updates on the various standard setting activities that have occurred since our January webcast. As always, the focus is on how those activities will affect not-for-profit organizations, with an emphasis on healthcare and higher education institutions.
- FASB issued a final standard significantly revising the disclosure requirements for participating employers (HRS insight)
4/26/13 | Human resource services
Responding to concerns regarding the poor funding levels of many defined benefit multiemployer pension plans, as well as the lack of information on these plans in financial filings, the Financial Accounting Standards Board (FASB) issued a final standard significantly revising the disclosure requirements for participating employers.
Dataline
Dataline: How FASB's financial instruments proposals would affect not-for-profit organizations (No. 2013-08)4/26/13 | Assurance services
In February 2013, the FASB issued a revised exposure draft of a proposed standard for the classification and measurement of financial instruments (the "C&M proposal"). A proposed impairment model for debt instruments was described in a separate exposure draft issued in December 2012 (the "impairment proposal"). This Dataline discusses how the classification, measurement, and impairment approaches described in those proposals might be applied by most not-for-profit organizations.
Dataline
Dataline: A summary of the IASB proposal on impairment of financial assets – Including a comparison to the IAS 39 model and the FASB’s credit loss proposal (No. 2013-07)4/25/13 | Assurance services
In March 2013, the IASB an exposure draft (ED), Financial Instruments: Expected Credit Losses, that proposes an expected loss model to replace the current incurred loss model of IAS 39, Financial Instruments: Recognition and Measurement. In December, 2012, the FASB also released a proposal on impairment of financial assets. This Dataline looks at the IASB's proposal and compares it to the IAS 39 model and the FASB's proposal.
In brief
In brief: FASB finalizes guidance for applying liquidation basis of accounting (No. 2013-22)4/23/13 | Assurance services
On April 22, the FASB issued Accounting Standards Update No. 2013-07, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. The new standard addresses when and how an entity should apply the liquidation basis of accounting. This In brief article provides an overview of the key provisions of the new standard.
M&A snapshot
We’re acquiring a company with significant in-process research and development (IPR&D) activities. What's next? (M&A snapshot)4/23/13 | Assurance services
This edition of Mergers & acquisitions — a snapshot provides an overview of the accounting rules and a glimpse into some of the issues companies face in the accounting and valuation of acquired IPR&D.
In brief
In brief: FASB and Private Company Council propose private company decision-making framework (No. 2013-21)4/17/13 | Assurance services
On April 15, 2013, the Financial Accounting Standards Board (Board) and Private Company Council (Council) jointly issued an invitation to comment on a proposed private company decision-making framework (the "framework").
Webcast
Were you unable to attend the Q1 2013 Current Accounting and Reporting Developments webcast ? Watch our on-demand version (CPE eligible)Assurance services
Did you miss the Q1 2013 "Current Accounting & Reporting Developments" webcast on March 20? If so, you still have an opportunity to view the webcast and earn CPE credit. Find out how.
- Non-GAAP measures (Insights from the Investment Community)
4/15/13 | PwC Investor Resource Institute
Companies in the United States typically follow generally accepted accounting principles (GAAP) when preparing financial statements. A non-GAAP measure is defined as a measure that excludes (or includes) amounts that are included (or excluded) in the most directly comparable measure calculated in accordance with GAAP. Read why members of the investment community find non-GAAP measures useful.
- The audit (Insights from the Investment Community)
4/15/13 | PwC Investor Resource Institute
Accurate and reliable financial statements are essential to the effective functioning of the capital markets. To that end, auditors play an important role by executing independent and objective audits of the financial statements that are prepared by management.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Clarification of Acceptable Methods of Depreciation and Amortization4/15/13 | Global accounting consulting services
PwC agrees with the principle of the proposed amendments although we are not convinced that the amendments are necessary.
In brief
In brief: FASB exposes consequential amendments for classification and measurement of financial instruments (No. 2013-20)4/12/13 | Assurance services
On April 12, the FASB issued an exposure draft of consequential amendments to the Accounting Standards Codification (ASC) that would result from its financial instruments classification and measurement proposal.
In brief
In brief: Lease accounting proposal expected by mid-May 2013; alternative views expressed (No. 2013-19)4/11/13 | Assurance services
The FASB met on April 10, 2013 to discuss the costs, benefits, and complexity associated with the proposed lease accounting rules. The FASB members expressed their individual points of view and voted 4 to 3 in favor of moving forward with the revised exposure draft. The FASB and IASB expect to issue a joint exposure draft in mid-May 2013. This In brief article provides an overview of the decisions reached at the FASB meeting.
Webcast
FASB and IASB proposals on impairment of financial assets webcast – April 25, 2013Assurance services
The FASB and IASB both recently issued proposals on financial instruments impairment for public comment. On this PwC webcast, we provide an overview of the key elements of both proposals (including the FASB's FAQ) and compare and contrast them.
IFRS news
IFRS news - April 20134/8/13 | Assurance services
PwC's monthly report shedding light on the IASB's activities. This edition looks at (1) Impairment of financial instruments - IASB publishes exposure draft, (2) Discount rates and IAS 19 - IC debates the meaning of 'high quality' and 'deep market', (3) IFRS for SMEs - post implementation feedback, (4) recent activity at the IASB on IAS 19R employee contributions exposure draft, conceptual framework discussions, early adoption of revenue standard, request for information on rate regulation, IASB work plan update, ASAF membership; and (5) know your IFRS 'ABC': ‘E’ for equity accounting.
- Decoding key metrics in cross-border acquisitions (Observations from the front lines)
4/4/13 | US Capital Markets and Accounting Advisory Services
US companies seeking to acquire acquisition targets headquartered outside of the United States should understand the foreign target’s financial information, including the application of non-US GAAP and the target’s accounting policies, and identify where GAAP and policy are not aligned with the buyer’s basis of preparing its financial information.
In brief
In brief: FASB issues exposure draft on reporting discontinued operations (No. 2013-18)4/4/13 | Assurance services
On April 2, 2013, the FASB issued a proposal that changes the criteria for reporting discontinued operations. The proposal also enhances disclosure requirements for discontinued operations and adds new disclosures for individually material dispositions that do not qualify as discontinued operations.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Novation of Derivatives and Continuation of Hedge Accounting4/2/13 | Global accounting consulting services
PwC supports the board’s efforts in clarifying whether an entity is required to discontinue hedge accounting when an over-the-counter (OTC) derivative is novated to a central counterparty (CCP) as required by law or regulation. We also appreciate the board’s responsiveness in addressing this urgent issue in a pragmatic way, as requiring entities to treat such novations as a discontinuance of hedge accounting would not provide useful information to investors.
- Medical device excise tax (updated March 28, 2013)
3/29/13 | Pharmaceuticals & life science
This edition of PwC's Pharmaceutical and Life Sciences Industry Alert reports that medical device manufacturers will need to begin accounting for this tax for all sales, other than tax free sales, beginning January 1, 2013 and will need to consider the impact of this tax on their 2013 results.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Transfers and Servicing (Topic 860): Effective Control for Transfers with Forward Agreements to Repurchase Assets and Accounting for Repurchase Financings3/29/13 | Assurance services
PwC fully supports the Board’s continuing efforts to respond in a timely manner to stakeholder concerns over elements of the transfers of financial assets accounting model.
PwC comment letter (IASB)
PwC Comments on Exposure draft: Classification and Measurement: Limited Amendments to IFRS 93/28/13 | Global accounting consulting services
PwC agrees with the board’s objectives to amend IFRS 9 and commend the board on their progress in achieving those objectives. The letter includes key comments that we would like to raise with the board.
In brief
In brief: FASB issues Q&A and extends comment period for credit impairment proposal (No. 2013-16)3/28/13 | Assurance services
On March 25, the FASB issued a document that addresses key questions about its proposed impairment model for financial assets. In addition, the FASB reached a decision at its March 28 meeting to extend the comment period for its impairment proposal to May 31, 2013.
Setting the standard
Setting the standard -- What you need to know about the FASB's and IASB's standard setting activities -- March 20133/25/13 | Assurance services
Our Q1-2013 edition provides updates on the latest developments in revenue recognition, classification and measurement of financial instruments, impairment of financial assets, leases, insurance contracts, and more.
Tax accounting insights
Tax considerations relating to fair value accounting3/25/13 | Tax accounting services
PwC has refreshed our 'Fair Value Accounting: Tax Considerations' publication (originally released in December 2008).
Dataline
Dataline: Financial instruments classification and measurement – FASB issues its exposure draft (No. 2013-05)3/22/13 | Assurance services
Classification and measurement is an important part of the FASB and IASB’s joint project on financial instruments. The boards have agreed on changes that will broadly converge the accounting for debt investments and financial liabilities, but significant differences in accounting for equity investments will remain. The FASB issued its exposure draft on February, 14 2013 with a comment period ending May 15, 2013. The comment period on the IASB exposure draft, which was issued in November 2012, ends on March 28, 2013. This Dataline looks at FASB’s proposals as outlined in its exposure draft and compares them to the IASB's model.
In brief
In brief: Boards meet separately on revenue – FASB on effective date and non-public entities, IASB on early application (No. 2013-15)3/22/13 | Assurance services
The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) met separately in March to discuss specific U.S. GAAP and IFRS matters related to the proposed revenue recognition standard. The FASB focused on non-public entities and reached decisions on disclosure requirements, transition, and effective date. The FASB also amended its previous decision about effective date for public entities. The IASB decided to permit early application of the revenue standard. The decisions by both boards are tentative and subject to change. Any remaining “sweep” issues will be discussed at future meetings.
PwC comment letter (IASB)
PwC Comments on Tentative agenda decision: IAS 10 Events after the reporting period—Reissuing previously issued financial statements3/19/13 | Global accounting consulting services
Following consultation with members of the PwC network of firms, this response summarizes the views of member firms who commented on the tentative agenda decision, published in the January 2013 edition of IFRIC Update.
Quarter close
The quarter close — First quarter 2013: Publication and new video perspectives3/18/13 | Assurance services
This edition of The quarter close highlights current developments in financial reporting, including key standard-setting developments in revenue, financial instruments, and other hot topics, as well as SEC and PCAOB regulatory updates.
Corporate Governance Series
Shareholder questions: considerations for 2013 annual meetings3/18/13 | Assurance services
This PwC publication is intended to help management and the board of directors of public companies prepare for the annual meeting of shareholders. It contains example questions on topics that may be top-of-mind for shareholders, along with background information and suggested actions for management’s consideration.
- Regulatory and standard-setting developments -- March 18, 2013
3/18/13 | Assurance services
This document provides a high-level summary of activities of the Securities and Exchange Commission (SEC), the Financial Accounting Standards Board (FASB), the Public Company Accounting Oversight Board (PCAOB), and others that may be of interest to audit committees, companies, and their stakeholders. It includes some of the relevant regulations, standards, and guidance that were recently issued or are on the horizon, both inside and outside of the U.S.
EITF observer
EITF observer: A meeting synopsis - March 20133/18/13 | Assurance services
At the EITF's March 14 meeting, the Task Force discussed four Issues, reaching a final consensus on two issues (12-B and 12-G) and consensus-for-exposure on one Issue (13-B). Further discussion is expected on one issue (12-F). This edition of EITF observer provides a synopsis of the meeting.
In brief
In brief: FASB moves forward with final standard on investment companies (No. 2013-14)3/14/13 | Assurance services
On March 13, 2013, the FASB met to discuss investment companies, a joint project with the IASB. The FASB discussed certain proposed disclosures designed to increase transparency into an investment company's interest in an investee fund. These investee fund disclosures have been the final area of focus as the FASB finalizes its standard on investment companies. At its meeting, the FASB decided to remove the proposed disclosures from the current project and re-evaluate them at a later date. The FASB also agreed to move forward with issuing a final standard on investment companies.
Webcast
Conflict minerals - Next steps: An auditor's perspective - April 9, 2013Assurance services
Conflict minerals compliance has quickly become one of the most pressing issues for both SEC and non-SEC registered companies. As we have spoken to a large number of companies regarding their conflict minerals implementation programs, we would like to share with you some observations and key takeaways.
Dataline
Dataline: Revenue from contracts with customers: Boards finalize redeliberations – A comprehensive look at the new revenue model (No. 2013-04)3/8/13 | Assurance services
The FASB and IASB substantively concluded redeliberations of their joint 2011 exposure draft, Revenue from Contracts with Customers, in February 2013. The boards reached decisions on the remaining key issues including disclosures, transition, and effective date at their most recent meetings. Details of these decisions, as well as a comprehensive look at the model at the end of the key redeliberations, are included in this Dataline. Any remaining “sweep” or new issues identified by the boards will be discussed at future board meetings, as needed.
In brief
In brief: IASB issues exposure draft on impairment of financial instruments (No. 2013-13)3/8/13 | Assurance services
Following several years of discussions and two previously published proposals, the IASB has issued an exposure draft, Financial Instruments: Expected Credit Losses. The proposed guidance introduces an expected loss impairment model that will replace the incurred loss model used today. This In brief article provides an overview the IASB's proposal.
- Finance Integration: Aligning the financial compass of a deal
3/7/13 | Transaction services
Integration success is critically dependent on an effective finance function to deliver business insight, help ensure compliance and controls, and create operational efficiencies for capturing deal value across the organization.
Webcast
Classification and measurement of financial instruments - An overview of the FASB proposal webcast – March 12, 2013Assurance services
This webcast provides an overview of the revised FASB proposal on financial instruments classification and measurement which is open for public comment until May 15, 2013.
Webcast
PwC's quarterly tax accounting webcast - Q1 2013 – April 4, 2013Tax accounting services
PwC invites you to join a panel of our Tax Accounting Services (TAS) specialists for a dialogue around relevant tax accounting matters including recent regulatory and legislative developments and a topical discussion of the uncertain tax position model under ASC 740.
- Brand: What's in a name? Careful consideration of brand valuation issues can improve deal reporting
3/7/13 | Assurance services
Mergers and acquisitions for retail and consumer product companies can be influenced by the brands involved in the transaction. Such "brand-rich" transactions can bring accounting complexities that requires close attention to the valuation and purchase accounting process.
- IASB/FASB Insurance Contracts Project - Meeting summaries
3/6/13 | Insurance
Insurers currently use a variety of different and largely inconsistent local approaches to measure the value of insurance contracts within their statutory financial statements. This diversity makes it difficult to compare companies and may fail to reflect the true economic value of insurance business, which can put insurers at a considerable disadvantage when competing for capital.
In brief
In brief: IASB issues exposure draft on novation of derivatives (No. 2013-12)3/6/13 | Assurance services
The IASB has issued an exposure draft proposing a limited scope amendment to IAS 39, Financial instruments: Recognition and measurement, and to the forthcoming chapter on hedge accounting in IFRS 9, Financial instruments. The exposure draft proposes some relief from the hedge accounting requirements when a derivative is novated to a central counterparty (CCP), such as a central clearing organization, under certain circumstances.
- Management’s Discussion and Analysis (Insights from the investment community)
3/5/13 | PwC Investor Resource Institute
The MD&A requirements call for a discussion of: the historical financial results for the period covered by the financial statements (typically three years), liquidity, capital expenditures, off-balance sheet arrangements, contractual obligations, and known prospective information. They also encourage management to describe matters that are most significant in the company’s circumstances and to avoid boilerplate discussions.
Webcast
Why yesterday’s seller is unprepared in today’s changing divestiture market webcast – March 26, 2013Transaction services
Divestiture activity remained brisk during 2012 driven by a continued desire by companies to generate cash, spin-off fast growing segments and exit underperforming or non-core assets. Companies that do the hard work up front to develop an articulated divestiture strategy supported by comprehensive and accurate company data are best positioned for long term success.
- Segment footnote disclosures (Insights from the investment community)
2/28/13 | PwC Investor Resource Institute
US accounting standards require public companies to disclose, in their financial statement footnotes, segment data based on the “management approach,” under which investors are provided with a view of the business through the eyes of management. Read more in this edition of Insights from the investment community.
- Beware of cliffs and waterfalls in renewable perspectives (Observations from the front lines)
2/27/13 | US Capital Markets and Accounting Advisory Services
Companies that structure renewable energy investments to allow investors to achieve returns through tax credits should also understand that the income statement impact of renewable energy investments can be particularly complex.
Tax accounting insights
FASB issues exposure draft proposing netting of unrecognized tax benefits when a net operating loss carryforward or tax credit carryforward exists2/26/13 | Tax accounting services
FASB exposure draft proposes that unrecognized tax benefits be netted against all same-jurisdiction deferred tax asset NOL and tax credit carryforwards
- Stay informed 2012 Financial Reporting Survey - Energy industry
2/21/13 | Energy & mining
Energy sector company audit committee members can use this PwC document to benchmark selected accounting policies with industry practices, identify trends for significant accounting estimates, and facilitate discussion on certain aspects of energy industry practice.
- Standard setters revisit push down accounting requirements (Observations from the front lines)
2/21/13 | US Capital Markets and Accounting Advisory Services
Push down accounting refers to instances in which an acquiring entity (or parent company) pushes its new basis down to the stand-alone financial statements of an acquired entity. The Emerging Issues Task Force (EITF) is in discussions regarding the circumstances that drive a change in accounting basis or an acquired entity's stand-alone financial statements. Potential changes could result in more instances where push down accounting is required.
In brief
In brief: Boards conclude key revenue redeliberations with decisions on disclosures and transition (No. 2013-11)2/21/13 | Assurance services
The FASB and IASB (the “boards”) reached decisions at their February 20 meeting on disclosure requirements, transition, and effective date for the revenue recognition standard. These decisions substantively conclude the boards' redeliberations on this project. The boards’ decisions are tentative and subject to change. Any remaining “sweep” issues will be discussed at future meetings.
Dataline
Dataline: FASB issues guidance on the reporting of amounts reclassified from accumulated other comprehensive income (No. 2013-03)2/21/13 | Assurance services
The FASB issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, on February 5, 2013. The standard is effective for public entities for annual periods, and interim periods within those periods, beginning after December 15, 2012. Non-public companies will adopt the standard one year later, but would be exempt from certain interim disclosure requirements.
In brief
In brief: Accounting implications of recent events in Venezuela (No. 2013-09)2/19/13 | Assurance services
On February 8, 2013, the Venezuela government announced that effective February 13, 2013 its currency would be devalued 32% and that the government-regulated rate mechanism referred to as the Transaction System for Foreign Currency Denominated Securities (SITME) market would be eliminated. The Venezuelan government also created a new department referred to as the Superior Body for the Optimization of the Exchange System to oversee foreign currency exchange policies. This In brief article highlights the key financial reporting impacts of these developments.
In brief
In brief: South Sudan considered highly inflationary in 2013 (No. 2013-10)2/19/13 | Assurance services
At its November 2012 meeting with the SEC staff, the Center for Audit Quality’s SEC Regulations Committee’s International Practices Task Force (IPTF) discussed whether South Sudan’s economy should be considered highly inflationary. The SEC staff affirmed that South Sudan’s economy should be treated as highly inflationary for US GAAP purposes no later than the first reporting period (including annual and interim periods) beginning on or after January 1, 2013. This In brief article describes why South Sudan is considered highly inflationary and highlights some of the financial reporting implications.
In brief
In brief: FASB proposes a new model for classification and measurement of financial instruments (No. 2013-08)2/15/13 | Assurance services
On February 14, the FASB issued a revised proposal for the classification and measurement of financial instruments. Classification and measurement is one part of the FASB and IASB’s broader financial instruments project. The other parts consist of impairment and hedge accounting. The IASB previously finalized its classification and measurement approach, but in late 2012, proposed targeted amendments to its guidance. This In brief article provides an overview of the proposal.
Tax accounting insights
Financial Accounting Foundation conducting review of accounting for income taxes2/14/13 | Tax accounting services
The Financial Accounting Foundation (FAF) announced that FASB Statement 109, 'Accounting for Income Taxes' will be the next standard for which it will conduct a post-implementation review (PIR).
In brief
In brief: Private Company Council holds its second meeting (No. 2013-07)2/14/13 | Assurance services
On February 12, the Private Company Council (Council) held its second meeting with the FASB (Board). Agenda items included discussing the private company decision-making framework (the "framework"), determining which projects to add to the Council’s technical agenda, selecting additional accounting topics for pre-agenda research, and providing input on selected current FASB projects.
- New tax law extends research & development tax credit
2/11/13 | Pharmaceuticals & life science
This edition of PwC's Pharmaceutical and Life Sciences Industry Alert reports that the new tax law extends research & development tax credit and provides guidance on accounting for the retroactive reinstatement of the R&D tax credit.
- 2012 technical update for the power and utilities industry
2/8/13 | Power & utilities
PwC's US Power and Utilities sector have released their 2012 technical update which provides our insights on emerging and ongoing accounting issues to support senior accounting and financial reporting personnel as they address year-end financial reporting issues.
- FEI President and CEO’s 2013 Top Challenges For Financial Executives
2/7/13
Financial Executives International (FEI) presents the top challenges for financial executives for 2013. Among key challenges are financial reform, ICEFR, cybersecurity, U.S. deficit and debt, taxes, private company accounting, IFRS, FASB/SEC appointments, health care, etc.
Corporate Governance Series
BoardroomDirect: Update on current board issues - January 20132/7/13 | Center for Board Governance
This issue of BoardroomDirect® covers PwC’s Key questions for board and audit committee members and 16th Annual Global CEO Survey, the need for directors to understand IT and social governance, the latest news on the 2013 proxy season, the new audit committee communication auditing standard, and the nomination of Mary Jo White as the next SEC chair.
In brief
In brief: FASB finalizes new requirements on items reclassified from accumulated other comprehensive income (Revised February 14, 2013*) (No. 2013-05)2/6/13 | Assurance services
On February 5, 2013, the FASB issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This guidance is the culmination of the board’s redeliberation on reporting reclassification adjustments from accumulated other comprehensive income. The new requirements will take effect for public companies in fiscal years, and interim periods within those years, beginning after December 15, 2012 (the first quarter of 2013 for public, calendar-year companies). This In brief article provides an overview of the key provisions.
In brief
In brief: FASB decides on new accounting model for certain guarantees (No. 2013-06)2/6/13 | Assurance services
The FASB decided at its February 6 meeting that certain guarantees issued by non-insurers, including certain financial guarantees issued by banks and other financial institutions, should be included in the scope of the proposed insurance contracts standard. The FASB’s tentative decision will be exposed for comment as part of its insurance contracts exposure draft. The exposure draft is expected by the end of the second quarter of 2013. This In brief article provides an overview of the FASB's tentative decision.
In brief
In brief: FASB finalizes amendment to clarify the scope of balance sheet offsetting disclosures (No. 2013-04)2/1/13 | Assurance services
On January 31, 2013, the FASB issued Accounting Standards Update No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (the "ASU"). The ASU limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. This In brief article provides an overview of the scope clarification.
- Challenges ahead for tax policy - 2013 Tax Legislative Outlook
1/31/13 | Washington national tax services (WNTS)
PwC's Washington National Tax Services (WNTS) offers a preview of the key tax policy issues facing the Obama Administration and Congress in 2013, including the outlook for comprehensive tax reform, deficit reduction, business tax provisions that expire at the end of 2013, and other tax policy matters of importance to today's business leaders.
In brief
In brief: Boards decide on scope of revenue recognition standard and other matters (No. 2013-03)1/31/13 | Assurance services
The FASB and IASB (the “boards”) decided at their January meeting to clarify the scope of the revenue standard, and they confirmed the accounting for repurchase agreements and performance fees by asset managers. They also confirmed that the accounting for transfers of non-financial assets that are not an output of an entity's ordinary activities should follow the guidance in the revenue recognition standard. This In brief article provides an overview of the boards' decisions and what's next.
Corporate Governance Series
Key questions for board and audit committee members, 2013 edition1/31/13 | Center for Board Governance
The 2013 edition addresses current regulatory activities in Washington, significant financial reporting matters, the new tax law and potential corporate tax reform, information technology oversight, as well as other topics that boards and audit committees should discuss with management at year-end and throughout the year.
PwC comment letter (AICPA)
PwC Comments on Proposed AICPA Financial Reporting Framework for Small- and Medium-Sized Entities1/29/13 | Assurance services
PwC fully supports efforts to enhance financial reporting for private companies, and believes that the most appropriate way to achieve meaningful change for private company stakeholders is through the collaborative efforts of the recently established Private Company Council (PCC) and the FASB. However, should the AICPA decide to issue this new non-GAAP framework, our comment letter provides observations and recommendations on changes the AIPCA should make to minimize confusion and enhance clarity. ...
Webcast
Using non-traditional consideration to close the M&A value gap webcast – February 19, 2013Transaction services
Dealmakers are increasingly using non-traditional forms of consideration to help facilitate negotiations and bridge value gaps on transactions. Learn about the trade-offs and the situations when different types of consideration are typically most beneficial.
Dataline
Dataline: Revenue from contracts with customers -- Boards conclude redeliberations on key revenue measurement and recognition issues (No. 2013-02)1/23/13 | Assurance services
The FASB and IASB (the "boards") met in November and December 2012 to continue redeliberating their joint revenue recognition project. The boards reached tentative decisions on key remaining measurement and recognition issues, including the constraint for recognizing revenue from variable consideration, collectibility, licenses, allocation of transaction price, and contract acquisition costs.
Webcast
Self study course: Revenue Recognition Exposure Draft UpdateUS GAAP & IFRS Convergence
Revenue is a key metric subject to considerable focus by investors and other stakeholders. Participants in this 90 minute self study course will gain a heightened understanding of recent developments on the revenue recognition proposal, along with potential impacts to their business.
EITF observer
EITF observer: A meeting synopsis - January 20131/21/13 | Assurance services
At the EITF's January 17 meeting, the Task Force discussed seven Issues, reaching a final consensus on two issues (11-A and 12-D) and consensus-for-exposure on two Issues (13-A and 13-C). Further discussion is expected on three issues (12-B, 12-F and 12-H). This edition of EITF observer provides a synopsis of the meeting.
Webcast
Fiscal Cliff Legislation: What it means to private companies & individuals webcast – January 23, 2013Private company services
On January 2, 2013, President Barack Obama signed into law the American Taxpayer Relief Act of 2012. Much of the new law will directly impact private companies and their owners. PwC's Private Company Services will host this webcast to discuss how tax legislation impacts private companies and high net worth individuals.
In brief
In brief: FASB proposes amendments to repurchase agreement accounting model (No. 2013-02)1/17/13 | Assurance services
On January 15, the FASB published for public comment an exposure draft to amend the accounting for repurchase agreements (aka “repos”) in an effort to identify those transactions that should be accounted for as a secured borrowing and to improve the associated accounting and disclosure requirements. The proposal will likely affect some companies that engage in certain types of repurchase agreements, including repos-to-maturity. It will also affect companies that engage in repurchase financing agreements and currently account for the components as a linked transaction. This In brief article provides an overview of the key provisions of the proposal.
Dataline
Dataline: Credit losses on financial assets -- An overview of the FASB's current expected credit loss model (No. 2013-01)1/16/13 | Assurance services
Impairment is a major component of the FASB and IASB's (the boards’) joint project to revisit most aspects of financial instruments accounting. In the aftermath of the recent financial crisis, the current incurred loss approach has been criticized for delaying the recognition of credit losses. The FASB has issued a new exposure draft on financial asset impairment. Our Dataline explains their "current expected credit loss" model and how it differs from the IASB's model.
Accounting guides
Guide to Accounting for Utilities and Power Companies - 2013 edition1/12/13 | Assurance services
PwC's newly developed Guide to Accounting for Utilities and Power Companies provides accounting guidance for reporting entities in the utility and power industry to consider when preparing financial statements in accordance with accounting principles generally accepted in the United States of America. It addresses a variety of areas such as commodity contracts, power-related investments, inventory, plant, asset retirement obligations, regulated operations, and more.
In brief
In brief: FASB further clarifies the scope of balance sheet offsetting disclosures (No. 2013-01)1/10/13 | Assurance services
At its January 9 meeting, the FASB discussed feedback on its exposure draft that proposes clarifications to the scope of the new balance sheet offsetting disclosures required by ASU 2011-11, Disclosures about Offsetting Assets and Liabilities. The exposure draft proposes that the offsetting disclosures only be applied to derivatives, repurchase agreements, and securities lending transactions to the extent that they are subject to a master netting arrangement or similar agreement. The FASB decided to clarify what would be considered a derivative for the purposes of the new offsetting disclosures and proceed with issuing the final scope clarification. This In brief article provides an overview of the board's decisions.
- Fiscal cliff legislation extends research credit, resolves M&A-related credit issue
1/8/13 | Washington national tax services (WNTS)
American Taxpayer Relief Act of 2012 extends the research credit for two years and resolves an issue regarding the treatment of qualified research expenditures. Read WNTS Insight fo rmore details.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities1/7/13 | Assurance services
PwC agrees with the proposed change to limit the disclosures to derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset or subject to a master netting arrangement or similar agreement.
- New tax law extends business tax incentives
1/5/13 | Washington national tax services (WNTS)
President Barack Obama on January 2 signed into law the "American Taxpayer Relief Act of 2012", which includes permanent extensions of certain 2001 and 2003 tax provisions for individuals with incomes below $400,000, and joint filers with incomes below $450,000.
PwC comment letter (IASB)
PwC Comments on IASB Request for Information: IFRS for SMEs1/3/13 | Global accounting consulting services
PwC global network of firms submitted comments on the IASB's request for information on IFRS for SMEs. The comments provided have been grouped into six broad categories to simplify our response and to avoid repetition. The Firm comments specifically on the scope of the SME standard, convergence with IFRSs, income taxes, options, convergence with the EU directives and the use of additional IASB guidance for SMEs.
- Congress passes fiscal cliff agreement to extend tax rates for incomes below $450,000; deal includes business "tax extenders"
1/1/13 | Washington national tax services (WNTS)
The President recently signed a fiscal cliff agreement that extended certain tax rates for incomes below $450,000 and included several business "tax extenders." Read WNTS Insight for more details.
In brief
In brief: FASB proposes new model for accounting for credit losses on debt instruments (No. 2012-60)12/21/12 | Assurance services
This week, the FASB issued a proposal that introduces a new model for accounting for credit losses on debt instruments. The proposal calls for an entity to recognize an allowance for credit losses based on its current estimate of contractual cash flows not expected to be collected. The FASB’s proposed model eliminates any threshold required to record a credit loss and allows entities to consider a broader information set when establishing their allowance for loan losses. In addition, the model aims to simplify current practice by replacing today’s multiple impairment models with one model that applies to all debt instruments. This In brief article provides an overview of the proposal.
In brief
In brief: FASB clarifies scope of nonpublic entity fair value disclosure exemption (No. 2012-59)12/20/12 | Assurance services
On December 19, 2012, the FASB met to clarify the applicability of an exemption from a specific fair value disclosure for nonpublic entities. The board decided to clarify that all nonpublic entities are exempt from the requirement to disclose the categorization by level of the fair value hierarchy for items disclosed but not measured on the balance sheet at fair value. This In brief article provides an overview of the board's decision and what's next.
Corporate Governance Series
BoardroomDirect: Update on current board issues - December 201212/19/12 | Center for Board Governance
This issue of BoardroomDirect® covers the relationship between the board and CIO regarding IT oversight, PwC's Our focus on audit quality report, the latest SEC whistleblower data, the SEC's leadership change and the release of a resource guide on the Foreign Corrupt Practices Act.
Setting the standard
Setting the standard -- What you need to know about the FASB's and IASB's standard setting activities -- December 201212/19/12 | Assurance services
There is no shortage of activity to report this quarter as the boards forged ahead on their major convergence projects. The FASB and IASB made several key decisions as they move closer toward issuing exposure drafts and final standards. In the Q4-2012 edition of Setting the standard, we update you on the latest developments of the joint standard setting projects of the FASB and IASB, as well as the latest on FASB-only projects.
- Accounting for Income Taxes: 2012 Year-end Hot Topics
12/18/12 | Tax accounting services
Calendar year 2012 has seen considerable activity across the global legislative and regulatory landscapes. In addition to one-off changes to tax laws in several key territories, certain legislative trends have had a significant impact on income tax accounting. This PwC publication is focused on the topics we believe will be most relevant to the preparation of 2012 year-end financial statements.
In brief
In brief: Boards conclude redeliberations on key revenue measurement and recognition issues (No. 2012-58)12/18/12 | Assurance services
The FASB and IASB reached decisions at their December meeting on allocating the transaction price to separate performance obligations, applying the proposed model to bundled arrangements, constraining the cumulative amount of revenue recognized on licenses, and accounting for contract acquisition costs. The boards’ decisions are tentative and subject to change. This In brief article provides an overview of the boards' decisions and what's next.
- PwC video perspectives on IFRS
12/17/12 | US GAAP & IFRS Convergence
In these videos, PwC partners discuss several key issues related to the adoption of IFRS in the US.
Point of view
Point of view: Assessing going concern -- Stakeholders would benefit from clarity in U.S. disclosure requirements12/17/12 | Assurance services
During the recent economic downturn, some stakeholders were surprised to learn that companies faced liquidity issues. As a result, the FASB and PCAOB are currently revisiting the accounting and auditing guidance around going concern assessments. Our Point of view on assessing going concern highlights that a standard that will require a company to provide earlier and more frequent, scalable disclosures that increase if conditions deteriorate will benefit stakeholders. However, we recognize that the auditor's role under the existing auditing standards is important to stakeholders. We believe improvements in the reporting model will be achieved most effectively by accounting and auditing standard setters working together to develop complementary standards.
Dataline
Dataline: Highlights of the 2012 AICPA National Conference on Current SEC and PCAOB Developments (No. 2012-22)12/13/12 | Assurance services
The 2012 AICPA National Conference on Current SEC and PCAOB Developments (the Conference) was held on December 3, 4, and 5, 2012. Conference presenters included representatives from regulatory and standard-setting bodies, auditors, users, preparers, industry experts, and an investor panel. Remarks centered mainly on the status of potential incorporation of IFRS into the U.S. financial reporting system, updates on regulatory and financial reporting matters, capital formation, and the auditing profession’s impact on the reliability and usefulness of financial statements.
M&A snapshot
Financial risk management considerations in an acquisition (M&A snapshot)12/13/12 | Assurance services
The acquisition of a business can have a significant impact on both the risk exposures and risk management strategies of the combined entity. In many cases, an acquirer’s financial risk exposure will increase as a result of the acquisition. However, there may be situations in which the acquiree’s operations reduce the acquirer’s current risk exposure. In any event, identifying potential changes in enterprise risks, creating an action plan to address them, and managing changes to risk management strategies post-acquisition are critical to developing short- and long-term solutions for integrating financial risk management considerations in an acquisition.
In brief
In brief: FASB agrees on changes to reporting of discontinued operations (No. 2012-57)12/13/12 | Assurance services
On December 12, 2012, the FASB (the “board”) met to resume redeliberations on its discontinued operations project. The project had been inactive since early 2010 while the board focused on its higher priority projects. At this meeting, the board reaffirmed its previous decision about the definition of a discontinued operation, modified certain disclosure requirements, and directed its staff to issue a revised exposure draft as soon as possible.
Quarter close
The quarter close — Fourth quarter 2012: Publication and new video perspectives12/12/12 | Assurance services
This edition of The quarter close has the latest updates and timely reminders to help you navigate your year-end reporting process with a number of hot topics, including fair value, asset impairments, pensions, valuation allowances, and more.
- Regulatory and standard setting developments - December 12, 2012
12/12/12 | Assurance services
The regulatory and standard-setting environment continues to be fluid with new regulations and standards emerging from the Securities and Exchange Commission, the Financial Accounting Standards Board, the Public Company Accounting Oversight Board, and others. This issue of Regulatory and Standard-Setting Developments provides a high-level summary of some of the relevant regulations, standards, and guidance that were recently issued or are on the horizon, both in and outside of the U.S., and other information that may be of interest to audit committees, companies, and others.
- Using qualitative impairment testing for FCC licenses
12/11/12 | Assurance services
Accounting Standards Update 2012-02 would enable broadcasters to streamline goodwill impairment testing on FCC licenses maintained as indefinite-lived assets. This PwC whitepaper discusses variables for a qualitative analysis, sometimes referred to as “Step 0,” may be feasible for FCC licenses.
PwC comment letter (SEC)
Review of 2012 SEC comment letter trends for energy companies12/10/12 | Energy & mining
This publication provides an analysis of SEC comment letters issued to registrants across the energy value chain, including exploration and production, midstream, downstream, drillers, oilfield services, and integrated energy companies.
- Avoiding hits to earnings when swapping fixed debt to floating (Observations from the front lines)
12/10/12 | US Capital Markets and Accounting Advisory Services
Companies pursuing fair value hedge accounting treatment for transacting interest rate swaps to exchange higher fixed rates on existing debt to lower floating rates are sometimes unaware of the quantitative effort needed because the "shortcut" method is often not available.
In brief
In brief: Private Company Council holds its inaugural meeting (No. 2012-56)12/10/12 | Assurance services
On December 6, the Private Company Council (the Council) held its inaugural meeting with the FASB. Key agenda items for the meeting included (1) discussion of stakeholder feedback on the Private Company Decision-Making Framework, (2) the direction of the Council's technical agenda, and (3) the official transition from the Private Company Financial Reporting Committee (PCFRC) to the Council. This In brief article provides an overview of the Council and FASB's discussion of each of these items.
- Companies are announcing special dividends - consider impact on stock compensation accounting (HRS Insight)
12/7/12 | Human resource services
Companies announce special one-time cash dividends that will be made before the end of the year. Consider the impact on stock compensation accounting.
Dataline
Dataline: Financial instruments classification and measurement - An update on the FASB's tentative approach to be exposed in Q1 2013 (No. 2012-21)12/7/12 | Assurance services
Classification and measurement is an important part of the FASB and IASB’s joint project on financial instruments. The FASB expects to issue a revised exposure draft in the first quarter of 2013 for public comment. The board will likely ask for feedback on the amount of time needed to implement the changes before deciding on an effective date for the final standard. The IASB issued an exposure draft of its proposed changes to IFRS 9 in late November 2012 with a proposed effective date of January 1, 2015. The exposure draft has a 120-day comment period. This Dataline provides a summary of the boards' decisions that is based on the project summaries posted on their websites, our observations of their meetings, and our understanding of their intent.
10Minutes
10Minutes on derivatives reform for non-financial services companies12/7/12 | Assurance services
For non-financial services companies, regulations introduced by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Basel III will result in significant changes to the derivatives market. Every aspect of a corporation using derivative to manage risk will ultimately be affected—from risk strategies and corporate funding to operations and accounting. This 10Minutes provides insight on the impacts of new regulation on corporate entities and what those entities need to do now in order to meet impending reform deadlines and ensure they're well equipped to manage increased costs and compliance responsibilities.
PwC comment letter (SEC)
Industrial Products sector 2012 SEC comment letter trends12/3/12 | Industrial products
PwC has issued a summary document of comment letter trends and considerations for year-end financial reporting for industrial products and services companies. Areas reviewed include management discussion and analysis, goodwill impairment, revenue recognition, and much more.
Dataline
Dataline: 2012 year-end accounting and reporting considerations - Leading practices and lessons learned on key topics (No. 2012-20)12/3/12 | Assurance services
This year end, entities continue to face many complex financial reporting issues such as providing new fair value disclosures, accounting for debt modifications, and evaluating revenue recognition guidance. Economic challenges around the world continue to have broad financial reporting implications. While not an all-inclusive list, this Dataline is intended to serve as a timely reminder of leading practices and lessons learned on key issues that companies should consider as they navigate the year-end financial reporting process.
Dataline
Dataline: Eurozone uncertainties - Financial reporting considerations of a country's exit from the Eurozone (No. 2012-19)11/30/12 | Assurance services
The Eurozone debt crisis continues to persist, leading some to believe that the crisis might result in a country exiting the Euro and adopting a new local currency. Many companies that could be affected by a country's exit from the Euro have started to consider how that might affect their operations, financing, and business strategies. Companies should also consider the financial reporting implications of the creation of a new currency.
PwC comment letter (FASB)
PwC Comments on Invitation to Comment: Disclosure Framework11/29/12 | Assurance services
PwC encourages the Board to continue its outreach to investors and other stakeholders as it decides which alternatives to proceed with and develops them into a proposal. PwC generally supports the Board's effort to improve the relevance and comparability of financial reporting by developing a framework for setting disclosure requirements.
In brief
In brief: IASB proposes limited amendments to its financial instruments guidance under IFRS 9 (No. 2012-55)11/29/12 | Assurance services
This week, the IASB issued its exposure draft proposing limited amendments to IFRS 9 (2010), Financial instruments. The proposed amendments are intended to: (1) Address application issues that have arisen since the original issuance of IFRS 9 with regard to financial assets measured at amortized cost, (2) Consider the interaction with the IASB’s insurance project, and (3) Reduce differences between IFRS 9 and the FASB’s proposed classification and measurement approach. This In brief article provides an overview of the IASB's proposed amendments and what's next.
- Tax accounting for insurance companies - 2012
11/27/12 | Insurance
This paper discusses the important changes to income tax accounting under statutory accounting principles (SAP), including accounting for uncertain tax positions, which became effective on January 1, 2012.
In brief
In brief: Boards make decisions on several major outstanding revenue issues (No. 2012-54)11/20/12 | Assurance services
An overview of the FASB and IASB's November 2012 decisions on revenue recognition from variable consideration; presentation of amounts not expected to be collected; and licenses, from PwC's CFOdirect Network.
Webcast
Deals webcast series: Navigating the complexities of joint ventures and business alliances – January 24, 2013Transaction services
The globalization of business models and dramatic change in the way businesses operate and compete in today's economy have resulted in a shift in M&A strategy and execution. Increasingly, corporations and investors are going beyond the traditional acquisition/disposal model, using joint ventures and business alliances to achieve their business development objectives. Join us for this PwC webcast to learn how you can navigate these often complicated business models.
Webcast
Deals webcast series: Year-End M&A Outlook for 2013 – December 18, 2012Transaction services
While uncertainty over the global economic environment and volatile equity markets significantly slowed U.S. deal volume earlier in the year, an uptick in activity during the end of the second quarter and through the third quarter, in conjunction with an active pipeline, indicated the M&A market may be regaining momentum halfway through the year. Watch this PwC webcast to learn the current state of play in the US, the trends impacting dealmaking, and what we envision the deal market could look like in 2013.
In brief
In brief: FASB amends new disclosures on items reclassified from accumulated other comprehensive income (No. 2012-53)11/19/12 | Assurance services
The FASB (the "board") met on November 14, 2012 to discuss the feedback received on the exposure draft on the new disclosures on items reclassified from accumulated other comprehensive income. The board decided to move towards a final standard after making decisions on presentation, interim disclosures, and the effective date. This In brief article provides an overview of those decisions and what's next.
Webcast
Revenue recognition exposure draft update webcast – November 29, 2012Assurance services
The FASB and IASB (the "boards") issued a revised exposure draft for their joint revenue recognition proposal in November 2011. The boards have been re-deliberating the project since July 2012 and have made several tentative decisions on the comments received from constituents on this exposure draft. We invite you to join us as we discuss key topics re-deliberated and related business impacts on our next PwC webcast.
Dataline
Dataline: Accounting and disclosure implications of Hurricane Sandy (No. 2012-17)11/12/12 | Assurance services
Hurricane Sandy is expected to be the second-costliest Atlantic hurricane in history, only surpassed by Hurricane Katrina in 2005. Many businesses were disrupted by Hurricane Sandy and its aftermath including the New York Stock Exchange, which was closed for two days. While not all-inclusive, this Dataline discusses several accounting and disclosure-related matters companies may encounter in dealing with the financial reporting implications of Hurricane Sandy.
Corporate Governance Series
BoardroomDirect: Update on current board issues - November 201211/9/12 | Center for Board Governance
This issue of BoardroomDirect® from PwC covers income tax accounting, bridging the IT confidence gap, proxy issues, auditor evaluation tool for audit committees, and FASB and IASB make progress on revenue redeliberations.
In brief
In brief: FASB plans to propose amendments to repurchase agreement accounting model before year-end (No. 2012-52)11/9/12 | Assurance services
At its November 7 meeting, the FASB (the “board”) discussed the effect on financial reporting complexity of the decisions reached in its project on accounting for repurchase agreements ("repos"). The board confirmed its previous decisions on the project and indicated it will issue an exposure draft for public comment later this quarter. The comment letter period will end on March 29, 2013. The board also made decisions at this meeting about transition, early adoption, and transition disclosures. This In brief article provides an overview of those decisions.
In brief
In brief: FASB moving forward on "going concern" standard (No. 2012-50)11/8/12 | Assurance services
Years after adding the project to its agenda, the FASB took a significant step forward at its November meeting toward developing a new going concern standard. With the stated objectives of bringing increased discipline, structure, and consistency to existing disclosure practices, the FASB decided to require management to formally perform going concern assessments and provide related footnote disclosures.This In brief article provides an overview of the FASB's key decisions and what's next.
In brief
In brief: AICPA seeks feedback on its Financial Reporting Framework for Small- and Medium-Sized Entities (No. 2012-51)11/8/12 | Assurance services
On November 1, 2012, the American Institute of Certified Public Accountants (AICPA) issued an exposure draft of its proposed Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs). The FRF for SMEs is intended to provide a financial reporting alternative for private companies not required to prepare US GAAP financial statements. It is a self-contained, special purpose framework that uses historical cost as its primary measurement basis. The AICPA requests that preparers, auditors, and users of the financial statements of privately owned SMEs submit comments on the proposed framework by January 30, 2013. This In brief article highlights the key features of the proposed framework and what's next.
Dataline
Dataline: Implications to hedge accounting of changes to derivative counterparties or hedging relationships (No. 2012-16)11/6/12 | Assurance services
Market protocols for derivatives may be changing in the near future. Financial reform legislation could make novations (in this case, substitution of counterparties to a contract) more common as over-the-counter (OTC) transactions are migrated to central exchanges. In anticipation of these changes, the International Swaps and Derivative Association (ISDA) asked the SEC’s Office of the Chief Accountant if the novation of a bilateral OTC derivative contract to a central counterparty "on the same financial terms" would require the designation of a new hedging relationship.
In brief
In brief: IASB finalizes definition of an "investment entity" (No. 2012-49)11/2/12 | Assurance services
Read this discussion of the IASB's October 2012 amendments to its existing guidance on the definition of an "investment entity," from PwC's CFOdirect Network.
In brief
In brief: FASB amends and clarifies scope of balance sheet offsetting disclosures (No. 2012-48)11/1/12 | Assurance services
Over the past several months, issuers and other constituents in a variety of industries have raised concerns to the FASB staff and board regarding the scope of the new balance sheet offsetting disclosure requirements required by Accounting Standards Update 2011-11, Disclosures about Offsetting Assets and Liabilities. In response to these concerns, at its October 31 meeting the FASB decided to amend and clarify the scope of the balance sheet offsetting disclosures. These disclosures are effective in Q1 2013 for calendar year-end companies. This In brief article provides an overview of the FASB's decision and what's next.
PwC comment letter (FASB)
PwC Comments on Invitation to Comment: Private Company Decision-Making Framework - A Framework for Evaluating Financial Accounting and Reporting Guidance for Private Companies10/30/12 | Assurance services
PwC generally believes that the draft framework identifies the appropriate matters to consider when determining whether a modification is appropriate. It identifies the significant differentiating factors that could support financial reporting differences between public and private companies.
In brief
In brief: IFRS Foundation responds to SEC’s final report on IFRS Work Plan (No. 2012-47)10/29/12 | Assurance services
On October 23, 2012, the IFRS Foundation (the organization that oversees the IASB) published a response (the "Foundation Staff response") to the SEC’s final report on its IFRS Work Plan (the "SEC Staff report") issued in July 2012. The Foundation Staff response is an assessment of the matters discussed in the SEC Staff report, including the operations of the IFRS Foundation and the IASB, the use of IFRS as global accounting standards, and issues related to incorporating IFRS into the US financial reporting system. This In brief article provides an overview of the Foundation Staff response.
Dataline
Dataline: Revenue from contracts with customers -- The redeliberations continue (No. 2012-15)10/25/12 | Assurance services
The FASB and IASB (the “boards”) met in September and October 2012 to continue redeliberating their joint revenue recognition project. They reached tentative decisions on the constraint for recognizing variable consideration, certain issues related to collectibility, time value of money, distributor and reseller arrangements, contract modifications, and measuring progress toward satisfying a performance obligation. This Dataline summarizes the boards’ redeliberations and tentative decisions made at the September and October joint meetings and the potential implications for certain industries.
- IFRS pocket guide
10/23/12 | Global accounting consulting services
PwC's IFRS Pocket guide 2012 provides a summary of the recognition and measurement requirements in International Financial Reporting Standards.
In brief
In brief: FASB and IASB decide on revenue contract modifications and measures of progress (No. 2012-46)10/19/12 | Assurance services
The FASB and IASB (the "boards") met on October 18, 2012 to discuss their joint project on revenue recognition. They reached decisions on contract modifications and measures of progress towards satisfying a performance obligation. The boards' decisions are tentative and subject to change. Other key issues still to be redeliberated include collectibility, the constraint on recognizing revenue from variable consideration, licenses, allocation of transaction price, disclosures, and transition. This In brief article provides an overview of the boards discussions and key decisions.
- IFRS and US GAAP: similarities and differences - 2012 update
10/18/12 | Assurance services
While the near-term use of IFRS in the US by public companies will not be required, IFRS remains and is becoming increasingly relevant to many US businesses. Companies will be affected by IFRS at different times and to a different degree, depending on factors such as size, industry, geography, M&A activity, and global expansion plans. To assist companies in understanding the current IFRS and US GAAP differences and the potential implications thereof, PwC has issued an updated edition of our popular guide, IFRS and US GAAP: similarities and differences.
Dataline
Dataline: Highlights of the 2012 AICPA National Conference on Banks and Savings Institutions (No. 2012-14)10/18/12 | Assurance services
The 2012 AICPA National Conference on Banks and Savings Institutions was held September 10 through 12, 2012 in Washington, DC. Representatives from the banking regulators, SEC, and standard setters presented at the Conference along with auditors, users, preparers, and industry experts. Presenters expressed views on a wide range of important accounting, auditing, and financial reporting topics. This Dataline provides highlights of topics discussed at the Conference.
- Foreign currency tax accounting
10/18/12 | Tax accounting services
This publication addresses key considerations in applying U.S. GAAP with respect to foreign currency income tax reporting. It is designed to be a reference guide to explore tax accounting for foreign currency. It begins with the “basics” and relevant areas of focus when applying Accounting Standards Codification (ASC) 830, Foreign Currency Matters, and also discusses the application of ASC 740, Accounting for Income Taxes, to foreign currency.
PwC comment letter (FASB)
PwC Comments on Proposed ASU, Presentation of Items Reclassified Out of Accumulated Other Comprehensive Income10/16/12 | Assurance services
PwC supports the proposal to provide information about the impact of reclassifications from accumulated other comprehensive income to net income in a single footnote. Most of the information to be disclosed is already included elsewhere in the financial statements. Consolidating it and providing a roadmap to the related disclosures will provide users with improved information without the operational challenges and costs that would have resulted from requiring separate presentation on the face of the income statement of the effects of the reclassifications on individual line items, particularly when such information is not readily available.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: The Liquidation Basis of Accounting10/8/12 | Assurance services
PwC suggests enhancements to the proposed guidance in the event that others believe it will be helpful to preparers and financial statement users and will improve consistency as to when and how to prepare financial statements using the liquidation basis of accounting.
In brief
In brief: FASB clarifies scope of new repurchase accounting model (No. 2012-45)10/5/12 | Assurance services
At its October 3 meeting, the FASB decided to eliminate the existing guidance for evaluating if a repurchase agreement entered into as part of a "repurchase financing" should be considered linked to a previously transferred financial asset. The board's decision means that under its proposed amendments to the existing model, these repurchase agreements will be accounted for as secured borrowings. This In brief article provides an overview of the FASB's discussions.
Corporate Governance Series
The quarter close - Directors edition: A look at this quarter's financial reporting issues - Q3 20129/27/12 | Center for Board Governance
The Q3 2012 edition focuses on the SEC's IFRS Work Plan, an update on Dodd-Frank rulemaking, and progress on FASB projects.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Disclosures about Liquidity Risk and Interest Rate Risk - Financial Instruments (Topic 825)9/25/12 | Assurance services
PwC agrees that improved disclosures about liquidity and interest rate risks could provide a deeper understanding of an entity's risk profile. While the Firm encourages the Board to continue its outreach to analysts and preparers as it further develops the proposed disclosures, it offers a number of recommendations for the Board's consideration.
Dataline
Dataline: Disclosure of items reclassified from accumulated other comprehensive income -- FASB proposes new disclosures (No. 2012-13)9/20/12 | Assurance services
In August 2012, the FASB issued an exposure draft of a proposal requiring new footnote disclosures for reclassifications from accumulated other comprehensive income to net income. Among other things, an entity would be required to disclose, using a tabular format, the amount reclassified from each component of accumulated other comprehensive income and the income statement line items affected by the reclassification. An entity would not need to show the income statement line item affected for certain components such as net periodic pension cost. This Dataline looks at the key provisions of the proposal and offers our observations.
Accounting guides
Guide to Accounting for Financing Transactions: What You Need to Know about Debt, Equity, and the Instruments in Between - 2012 edition9/19/12 | Assurance services
The accounting guidance for the issuance, modification, conversion and repurchase of debt and equity securities has developed over many years into a complex set of rules. Before the FASB codified the accounting standards, the accounting guidance applicable to a single transaction was contained in a number of separate FASB Standards, EITF Issues, interpretations, and speeches. Although the guidance is now codified within the FASB's Accounting Standards Codification, the analysis continues to involve detailed and sequential consideration of the relevant provisions of the guidance. This PwC Guide provides a roadmap to the applicable accounting literature to help you determine which steps are necessary for a particular transaction.
Dataline
Dataline: Disclosures about liquidity risk and interest rate risk -- A closer look at the proposed standard (No. 2012-12)9/18/12 | Assurance services
In June 2012, the FASB issued a proposal that would require companies to provide new disclosures about liquidity and interest rate risks. The proposal calls for quantitative exhibits and qualitative disclosures about risks arising from an entity's recorded and unrecorded financial instruments and cash flow obligations. Additionally, it provides separate disclosure requirements for any entity or segment defined as a "financial institution." This Dataline looks at the proposed disclosures and offers our observations.
In brief
In brief: COSO releases "Internal Control over External Financial Reporting: Compendium of Approaches and Examples" for public comment (No. 2012-43)9/18/12 | Assurance services
On September 18, 2012, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) released the Internal Control over External Financial Reporting: Compendium of Approaches and Examples (the Compendium) for public comment through November 20, 2012. In conjunction with the release of the Compendium, COSO has made available two other documents. This In brief article provides an overview of the Compendium.
Quarter close
The quarter close — Third quarter 2012: Publication and new video perspectives now available9/17/12 | Assurance services
This edition of The quarter close highlights the SEC report on IFRS, the latest on conflict minerals, health care reform, and several FASB releases that are sure to keep you busy this fall. Video perspectives are also now available.
- Regulatory and standard-setting developments -- September 17, 2012
9/17/12 | Assurance services
As potentially significant regulations and standards emerge from the Securities and Exchange Commission (SEC), the Financial Accounting Standards Board (FASB), the Public Company Accounting Oversight Board (PCAOB) and others, companies will want to stay ahead of the changes impacting their businesses. This publication provides a high-level summary of some of the relevant guidance, regulations, and standards that were recently issued or are being considered, both in and outside of the U.S.
Dataline
Dataline: Leases -- One size does not fit all: A summary of the boards' redeliberations (No. 2012-11)9/17/12 | Assurance services
The FASB and IASB jointly issued the initial leases exposure draft in August 2010 (the "initial ED"). A majority of the over 800 comment letters received raised significant concerns about the proposals. Redeliberations began in January 2011 and were substantially completed in July 2012. A "revised ED" is planned for the end of November 2012 (although this may slip into early 2013), with a 120-day comment period. This Dataline looks at both the lessee and lessor proposed accounting models that will be included in the revised ED.
EITF observer
EITF observer: A meeting synopsis - September 20129/13/12 | Assurance services
At the EITF's September 11 meeting, the Task Force discussed five Issues, reaching a final consensus on three issues (12-A, 12-C and 12-E) and consensus-for-exposure on two Issues (11-A and 12-G). This edition of EITF observer provides a synopsis of the meeting.
PwC comment letter (IASB)
PwC Comments on Draft Interpretation DI/2012/1: Levies charged by public authorities on entities that operate in a specific market9/12/12 | Global accounting consulting services
The PwC network global network of firms believes that the application of the conclusions in the draft interpretation will result in accounting that does not reflect the economic substance of many levies.
In brief
In brief: FASB determines additional disclosure requirements for repurchase agreements (No. 2012-42)9/12/12 | Assurance services
The FASB decided at its September 5 meeting to propose additional disclosure requirements for repurchase agreements accounted for as secured borrowings and for repurchase agreements accounted for as sale transactions with a forward repurchase commitment. This In brief article provides an overview of the proposed disclosures.
Dataline
Dataline: SEC adopts conflict minerals rule -- Public and nonpublic companies in many industries are affected (revised January 29, 2013) (No. 2012-10)9/11/12 | Assurance services
On August 22, 2012, the SEC approved a final rule requiring certain issuers to publicly disclose their use of conflict minerals [tantalum, tin, tungsten, and gold] and whether those minerals originated in the Democratic Republic of the Congo ("DRC") or adjoining countries (“covered countries”). This Dataline looks at the key provisions of the final rule. Also included is a supplement on frequently asked questions on conflict minerals.
In brief
In brief: IASB issues draft of forthcoming new hedge accounting requirements (No. 2012-40)9/11/12 | Assurance services
On September 7, 2012, the IASB issued a draft of the general hedge accounting requirements that will be added to IFRS 9, Financial Instruments (the Draft). The current rules on hedge accounting in IAS 39, Financial Instruments: Recognition and Measurement have frustrated many preparers, as the requirements have not been well linked with common risk management practices. The detailed rules have at times made achieving hedge accounting impossible or very costly, even when the hedge was an economically rational risk management strategy. The IASB has addressed several of these concerns in this third phase of its efforts to replace IAS 39 with IFRS 9. This In brief article provides an overview of the key provisions of the Draft.
In brief
In brief: FASB reaches conclusion on impairment model for financial assets measured at FV-OCI (No. 2012-41)9/11/12 | Assurance services
The FASB recently began discussing a revised impairment model for financial assets. At its September 7 meeting, the FASB made a key decision with respect to the impairment model by tentatively concluding that the current expected credit loss (CECL) model should apply to financial assets measured at fair value with changes in fair value recorded through other comprehensive income (FV-OCI). However, the FASB also decided to allow a practical expedient in applying the new model. This In brief article provides an overview of the FASB's discussions.
Accounting guides
Guide to Accounting for Variable Interest Entities - 2012 edition9/6/12 | Assurance services
This fifth edition of PwC's guide provides the latest additional discussion and examples on a number of emerging practice issues involving the accounting for variable interest entities to consider in applying the model. The purpose of this guide is to clarify a complex area of accounting by bringing together, in one publication, all of the relevant PwC guidance on accounting for variable interest entities; to provide an overall framework for the application of the VIE model; to highlight key questions and answers; and to offer our perspectives, based on our analysis of the guidance and experience in applying it.
Tax accounting insights
Deferred taxes on foreign earnings: A road map9/6/12 | Tax accounting services
Asserting indefinite reinvestment traditionally has been a widespread practice among multinational businesses. A majority of large companies make the assertion with respect to much, if not all, of their foreign earnings. To assist organizations in making this assertion, PwC has refreshed this publication (originally released in December of 2010).
Accounting guides
Guide to Accounting for Income Taxes - 2012 edition9/5/12 | Assurance services
The overall accounting model for income taxes has been in place for many years, yet the accounting for income taxes continues to pose many challenges for preparers, users, and auditors. Among those challenges are the tax accounting rules for valuation allowance, intraperiod allocation, business combinations, and foreign operations. This PwC guide is intended to clarify the fundamental requirements involved in the accounting for income taxes and to highlight key points that should be considered before and after transactions are undertaken.
Accounting guides
Guide to Accounting for Stock-based Compensation - 2012 edition9/5/12 | Assurance services
Nearly eight years after being issued, the application of the guidance contained in ASC 718, Compensation—Stock Compensation, continues to be a complex undertaking. The guidance’s many nuances impact not only the accounting for employee stock-based compensation, but also the related corporate income tax accounting, the calculation of earnings per share, and the presentation of the cash flow statement. The 2012 edition of PwC's stock-based compensation guide explains those and many other issues.
Accounting guides
Guide to Accounting for Derivative Instruments and Hedging Activities - 2012 edition9/4/12 | Assurance services
This PwC guide offers a comprehensive discussion of the accounting guidance for derivatives and hedging activities contained in ASC 815, Derivatives and Hedging. Domestically and internationally, the volume, variety, and inherent complexity of derivative transactions have steadily increased and the nature of hedging activities continues to evolve. The guide is intended to help preparers and accountants successfully navigate the rules and principles for appropriately accounting for derivative transactions.
Accounting guides
Guide to Accounting for Transfers and Servicing of Financial Assets - 2012 edition9/4/12 | Assurance services
FASB ASC 860, Transfers and Servicing, has proven difficult to apply in practice. Acknowledging this, in 2009 the FASB amended ASC 860 to address practice issues highlighted most recently by events related to the economic downturn. The sweeping impact of this guidance and its amendments on securitizations and financial asset transfer activity is significant for financial companies, but it extends beyond the financial sector and highlights the need for all companies to gain a precise knowledge of its accounting implications. This PwC guide offers a comprehensive exploration of a complex and still evolving area of accounting: the accounting for transfers/securitizations and related transactions.
- Private companies should analyze the impact of the new tangible property regulations
9/3/12 | Private company services
Under the new tangible property regulations published last December, private companies should review their current methods of accounting in light of the temporary regulations to determine if a Form 3115 is required for the years beginning on or after January 1, 2012. If an accounting method change is required, then they should review the new revenue procedures to assess which method changes should be filed in 2012 and/or 2013 to comply with the temporary regulations.
Accounting guides
Global Guide to Accounting for Business Combinations and Noncontrolling Interests - 2012 edition9/3/12 | Assurance services
This PwC guide explains the fundamental principles of accounting and reporting for business combinations and noncontrolling interests under both U.S. generally accepted accounting principles and International Financial Reporting Standards. This guide also includes our perspectives on the application of those principles, as well as our insights on the challenges of accounting for intangible assets and goodwill in the postcombination period.
- FASB disclosure proposals: Update
8/28/12 | Tax accounting services
The FASB recently issued several project updates pertaining to financial statement disclosures. This PwC Tax NewsAlert briefly describes these developments and their potential implications with respect to tax matters.
Dataline
Dataline: FASB solicits feedback on its framework for improving financial statement disclosures (No. 2012-09)8/27/12 | Assurance services
On July 12, 2012, the FASB issued a Discussion Paper — Invitation to Comment on Disclosure Framework. In the Discussion Paper, the Board is seeking stakeholder feedback on twenty-two questions designed to identify information that should be disclosed in notes to the financial statements to make them more relevant, flexible, and better organized. Comments on the DP are due November 16, 2012. This Dataline takes a look at the topics on which the FASB is requesting comments and offers our observations.
In brief
In brief: SEC adopts rule requiring payment disclosures by resource extraction issuers (No. 2012-39)8/24/12 | Assurance services
On August 22, 2012, the SEC commissioners voted (by a 2 to 1 margin with recusals from Chairman Schapiro and Commissioner Paredes) to approve the final rule mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring resource extraction issuers to disclose certain payments made to governments. It is expected that the final rule will impact approximately 1,100 issuers. The final rule represents the culmination of a process that began in December 2010 when the SEC exposed a proposed rule for public comment, generating over 150 unique comment letters.This In brief article provides an overview of the new rule.
In brief
In brief: FASB makes key decisions about the revised impairment model for financial assets (No. 2012-37)8/23/12 | Assurance services
Earlier this month, the FASB directed its staff to explore a revised impairment model for financial instruments. At its August 22 meeting, the board made some key decisions about the revised model. The board is considering a model that incorporates the concept of expected losses, but applies that concept to all financial assets and uses a single measurement approach. This In brief article provides an overview of the key decisions made at the board meeting.
In brief
In brief: SEC adopts rule for disclosing use of conflict minerals (No. 2012-38)8/23/12 | Assurance services
On August 22, 2012, the SEC commissioners voted 3-2 to approve the final rule requiring companies to publicly disclose their use of conflict minerals and whether those minerals originated in the Democratic Republic of the Congo (DRC) or adjoining countries (“covered countries”). This In brief article provides an overview of the final rule.
Point of view
Point of view: Other comprehensive income -- A consistent approach would improve information for investors8/23/12 | Assurance services
The FASB and IASB have a number of projects underway that could further expand or otherwise change what is reported within net income, and outside of net income within other comprehensive income. Existing accounting standards do not provide clear principles for when items should be excluded from net income and recognized in other comprehensive income. In this Point of view, we observe that we have heard many diverse views from investors, preparers, standard setters, and auditors on this topic. We believe that more consistency regarding the attributes of items initially excluded from net income would be beneficial for investors...
Dataline
Dataline: Indefinite-lived intangible asset impairment -- FASB issues guidance that simplifies impairment test and allows early adoption (No. 2012-08)8/17/12 | Assurance services
The FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (the revised standard), on July 27, 2012. The revised standard is intended to reduce the cost and complexity of testing indefinite-lived intangible assets other than goodwill for impairment by providing entities with an option to perform a "qualitative" assessment to determine whether further impairment testing is necessary. The approach is similar to the guidance finalized last year for goodwill impairment testing. This Dataline looks at the key provisions of the revised standard and offers our observations.
In brief
In brief: FASB proposes new disclosures on items reclassified from accumulated other comprehensive income (No. 2012-36)8/17/12 | Assurance services
On August 16, 2012, the FASB issued an exposure draft requiring new footnote disclosures for reclassifications from accumulated other comprehensive income to net income. The FASB believes its proposed footnote disclosures balance preparer concerns for a practical approach with financial statement users need for greater transparency about the impact of reclassification adjustments on net income. Comments on the exposure draft are due October 15, 2012. This In brief article provides an overview of the exposure draft.
- Uncovering blind spots in deal valuations
8/13/12 | Transaction services
Successful deal making requires a focus on the relationship between risk and return but potential blind spots can affect the expected value from an acquisition. This publication discusses how enhanced diligence on valuation issues can improve the price assessment against intrinsic value and reduce the risk of overpaying for targets.
- How revised M&A accounting standards are impacting deals
8/10/12 | Transaction services
Accounting for mergers and acquisitions has always been complex—and since a new standard changed the way companies account for and report deals, that endeavor has become even more involved. PwC comments.
In brief
In brief: FASB debates the path forward for investment property entities (No. 2012-34)8/10/12 | Assurance services
The FASB met on August 8, 2012 to discuss the next steps on its project on investment property entities. The FASB did not make a final decision on the path forward; however, the board tentatively decided not to continue developing an entity-based approach for investment property. This In brief article provides an overview of the key issues and what's next for the project.
Dataline
Dataline: Revenue from contracts with customers -- 'Ready, set, redeliberate' (No. 2012-07)8/9/12 | Assurance services
The FASB and IASB met in July to begin redeliberating their joint revenue recognition project. This PwC Dataline summarizes the boards’ redeliberations and tentative decisions made during the July board meeting, and the potential effects on certain industries. It also includes audio links to additional information on selected topics.
Dataline
Dataline: SEC Staff releases its final report on its IFRS Work Plan (No. 2012-06)8/8/12 | Assurance services
The SEC Staff recently published its final Staff Report regarding the potential impact of incorporation of IFRS into the US financial reporting system. This Dataline looks at the six key areas covered in the Staff Report and offers our observations.
Podcast
Podcast: Balance sheet offsetting disclosuresAsset management
In this podcast, a PwC Assurance senior manager summarizes the disclosure requirements under Accounting Standards Update 2011-11, Disclosures about Offsetting Assets and Liabilities (ASU 2011-11).
In brief
In brief: FASB makes further decisions on repurchase agreement accounting (No. 2012-33)8/2/12 | Assurance services
Read this update on the FASB's August 2012 FASB tentative decision to extend a previously proposed exception to the financial asset sale accounting rules for certain sale and repurchase agreements, from PwC's CFOdirect Network.
- Power and Utilities Alert 2012-08: Revenue from contracts with customers
8/1/12 | Power & utilities
The Financial Accounting Standards Board (FASB) and International Accounting Standards Board discussed the 2011 joint exposure draft, Revenue from Contracts with Customers. The exposure draft respondents requested guidance on disaggregating contract deliverables into separate performance obligations.
In brief
In brief: FASB decides to explore a revised impairment model for financial assets (No. 2012-32)8/1/12 | Assurance services
Over the past several months, the FASB and IASB have jointly deliberated a proposed "three bucket" impairment model for financial assets. After recently announcing its intent to further discuss key aspects of the model, the FASB met on August 1 to discuss the next steps for the project. After considering the results of outreach efforts and constituent feedback, the FASB unanimously agreed with concerns that aspects of the "three bucket" impairment model are complex and difficult to understand. As a result, the FASB will not move forward with an exposure draft on the "three bucket" impairment model and will instead explore a revised approach. This In brief article provides an overview of the key issues and what's next.
In brief
In brief: FASB issues Invitation to Comment on Private Company Decision-Making Framework (No. 2012-31)8/1/12 | Assurance services
Read this update on the FASB's Invitation to Comment on Private Company Decision-Making Framework, from PwC's CFOdirect Network.
PwC comment letter (IASB)
PwC Comments to the IASB on Tentative Agenda Decision: IAS 19 , Employee benefits - Accounting for contribution-based promises7/30/12 | Global accounting consulting services
PwC global network of firms supports the Interpretations Committee's decision that the accounting for employee benefit plans with a promised return on contributions or notional contributions explored in the Draft IFRIC should be further considered.
In brief
In brief: FASB clarifies accounting for Continuing Care Retirement Communities refundable entrance fees (No. 2012-29)7/27/12 | Assurance services
On July 24, 2012, the FASB issued guidance addressing the accounting for refundable entrance fees received by continuing care retirement communities. In summary, the FASB clarified that a continuing care retirement community should classify the refundable entrance fee as deferred revenue only when its resident contract provides for repayment of the fee upon reoccupancy, the repayment is limited to the proceeds received from the new occupant, and the entity's policy and practice is to enforce the refund limitation. Otherwise, the entrance fee is classified as a liability. This In brief article provides further information on the new guidance.
In brief
In brief: FASB issues final standard to simplify indefinite-lived intangible impairment test (No. 2012-30)7/27/12 | Assurance services
On July 27, the FASB issued Accounting Standards Update No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (the revised standard). The revised standard is intended to reduce the cost and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. It allows companies to perform a "qualitative" assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. This In brief article provides an overview of the revised standard.
Podcast
Podcast: New Presentation Requirements for Comprehensive IncomeAsset management
PwC's Craig Cooke, director in the National Professional Services Group, discuss the new presentation requirements for comprehensive income. Part of the Professional Development Program series, this podcast includes an overview of Accounting Standards Update (ASU) 2011-05, which was issued in 2011, and also addresses the indefinite deferral of one of the new requirements contained in ASU 2011-05.
In brief
In brief: FASB and IASB redeliberate to make the proposed revenue standard less "onerous" (No. 2012-28)7/20/12 | Assurance services
The FASB and IASB (the boards) met on July 19 to discuss their joint project on revenue recognition. They reached decisions on identifying separate performance obligations, performance obligations satisfied over time, and onerous performance obligations.
- Power and Utilities Alert 2012-7: Beware of cliffs and waterfalls - Accounting for renewable investments
7/20/12 | Power & utilities
This Power and Utilities alert highlights accounting considerations for investors in renewable energy projects with tiered capital structures when applying the equity accounting method.
- Entertainment & Media asset valuation in the Digital Age
7/20/12 | Transaction services
PwC believes that the traditional methods employed to value intangible E&M assets — while still valid — may ultimately need to evolve in the interest of improved reporting. This new publication, Why Entertainment and Media companies should reassess asset valuation in the Digital Age, discusses some timely valuation issues for E&M companies
In brief
In brief: Lease accounting redeliberations come to an end, but alternative views are on the horizon (No. 2012-26)7/19/12 | Assurance services
At their July 17 joint meeting, the FASB and IASB (the boards) completed their redeliberations of the leases project and instructed their staff to begin drafting the revised exposure draft. The boards expect to issue the revised exposure draft by the end of November 2012 with a 120-day comment period. The difficulties encountered during the 18-month-long redeliberation process were highlighted when the board members were asked whether they planned to present an alternative view to the revised proposals. Some members of each board indicated that they may present alternative views. This In brief article highlights some of their concerns.
In brief
In brief: FASB announces intent to further discuss key aspects of proposed impairment model for financial assets (No. 2012-27)7/19/12 | Assurance services
On July 18, the FASB and IASB (the boards) met to discuss the financial instruments project. At the conclusion of the meeting, the FASB announced its intent to continue discussions about several key aspects of the impairment model, as well as consider the
- Update on power and utilities accounting for rate-regulated activities under IFRS (Power and Utilities Alert 2012-6)
7/18/12 | Power & utilities
This Power and Utilities Alert describes recent developments regarding accounting for rate-regulated activities under International Financial Reporting Standards (IFRS). It includes observations related to discussions on rate-regulated activities held during an IFRS Interpretations Committee (the Committee) meeting on July 10, 2012. This Alert supplements and updates Alert 2012-5.
Practical tip
Practical tip: Changes in percentage-of-completion contract estimates -- disclosure requirements and considerations (No. 2012-04)7/18/12 | Assurance services
This Practical tip highlights the U.S. GAAP disclosure requirements and considerations relating to changes in contract estimates when using the percentage-of-completion method of accounting.
- Global tax accounting services newsletter: April-June 2012
7/18/12 | Global tax services
This quarterly newsletter from PwC's Global Tax Accounting Services Group highlights issues that may be of interest to tax executives, finance directors and financial controllers. In this release, we discuss a recent update to the financial accounting convergence projects and other accounting and reporting developments along with the related tax accounting considerations.
In brief
In brief: SEC Staff releases final report on its IFRS Work Plan (No. 2012-25)7/16/12 | Assurance services
Read this update on the SEC staff's July 2013 final report on its IFRS Work Plan, from PwC's CFOdirect Network
In brief
In brief: FASB solicits input on ways to improve disclosure effectiveness (No. 2012-24)7/13/12 | Assurance services
Read this discussion on the FASB's bid for input on ways to improve disclosure effectiveness, from PwC's CFOdirect Network.
Podcast
Podcast: An update on the JOBS ActAssurance services
The second quarter 2012 'Current Accounting and Reporting Developments' webcast held on June 20, 2012 included a discussion on the JOBS Act by PwC's John May and Bill Burke. This segment of the webcast is now available for podcast download.
In brief
In brief: FASB proposes guidance for applying liquidation basis of accounting (No. 2012-22)7/9/12 | Assurance services
On July 2, 2012, the FASB issued a proposal addressing when and how an entity should apply the liquidation basis of accounting. The proposal would require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is "imminent," as defined in the proposal. This In brief article provides an overview of the FASB's proposal.
In brief
In brief: FASB votes to discontinue loss contingencies project (No. 2012-23)7/9/12 | Assurance services
After a long hiatus on its loss contingencies project, the FASB voted today to remove this controversial project from its agenda. This In brief article highlights the project history and some of the reasons cited by board members for discontinuing the pro
In brief
In brief: FASB tentatively agrees on approach for repurchase agreement accounting (No. 2012-19)6/29/12 | Assurance services
The FASB tentatively decided this week to propose specifying the types of repurchase agreements (also known as "repos") that should be accounted for as secured borrowings based on six criteria. These types of transactions would be an exception to the gene
In brief
In brief: GASB approves new pension standards for state and local governments (No. 2012-21)6/29/12 | Assurance services
This week, the GASB voted to approve new pension accounting and reporting standards that will result in significant changes for governmental defined benefit pension plans and the employers participating in them. GASB Statement No. 67, Financial Reporting
In brief
In brief: IASB finalizes amendments to transition guidance for new consolidation standards (No. 2012-20)6/29/12 | Assurance services
This week, the International Accounting Standards Board (IASB) issued a final standard that amends the transition guidance for three standards. The three affected standards are: IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements, and
In brief
In brief: U.S. Supreme Court upholds health care law (No. 2012-17)6/28/12 | Assurance services
Read this commentary on the June 2012 US Supreme Court ruling on the ACA, and its effect on financial statement accounting and disclosures, from PwC's CFOdirect Network.
In brief
In brief: FASB proposes new disclosures about liquidity and interest rate risks (No. 2012-18)6/28/12 | Assurance services
Read this discussion of the FASB's June 2012 proposed new disclosures about liquidity and interest rate risks, from PwC's CFOdirect Network.
EITF observer
EITF observer: A meeting synopsis - June 20126/22/12 | Assurance services
At the EITF's June 21 meeting, the Task Force discussed the three Issues reaching a consensus-for-exposure on two Issues (12-B and 12-D). Further discussion is expected for one Issue (11-A). This edition of EITF observer provides a synopsis of the meeting.
In brief
In brief: FASB to issue a revised proposal on reclassifications from other comprehensive income (No. 2012-16)6/22/12 | Assurance services
This week the FASB decided to issue an exposure draft requiring new footnote disclosures for reclassifications from accumulated other comprehensive income to net income. In its 2011 standard on the presentation of comprehensive income, the FASB required r
Corporate Governance Series
The quarter close - Directors edition: A look at this quarter's financial reporting issues - Q2 20126/21/12 | Center for Board Governance
This quarterly publication is designed to keep directors informed about the latest accounting and financial reporting issues developments. The Q2-2012 edition discusses items including the JOBS Act, the latest on lease accounting, how the fate of health care reform could impact your company this quarter, more on uncertainly in the Eurozone, a proposed new disclosure on liquidity and interest rate risk, an update on Dodd-Frank implementation, SEC push back on non-GAAP measures, IFRS, possible alternatives to mandatory audit firm rotation, PCAOB standard setting, recent FASB activity, corporate governance and more.
Practical tip
Practical tip: Undistributed foreign earnings: disclosure requirements and considerations (No. 2012-03)6/19/12 | Assurance services
Undistributed foreign earnings that are indefinitely reinvested outside the United States result in a significant unrecorded tax liability for many U.S.-based multinationals. The amount of undistributed foreign earnings has grown substantially in recent years. As a result, expectations for transparency have increased along with concerns about a lack of comparability or consistency in disclosures. This Practical tip focuses on the U.S. GAAP disclosure requirements and considerations relating to undistributed foreign earnings.
- XBRL reporting risk and the role of internal audit
6/15/12 | Internal audit services
This paper reviews the risks when implementing XBRL and suggests how internal audit functions can help their organizations address reporting risks and improve supporting processes.
In brief
In brief: A dual model for lease accounting: redrawing the lines (No. 2012-15)6/15/12 | Assurance services
After more than a year of deliberations, in June 2012 the FASB and IASB took a big step forward in finalizing their revised proposals for lease accounting. PwC's CFOdirect Network comments.
Dataline
Dataline: New fair value measurement standard -- Adoption of the new guidance: First quarter 2012 measurement and disclosure observations (No. 2012-05)6/14/12 | Assurance services
This PwC Dataline provides observations on how new fair value guidance was implemented in the first quarter by a sample of 37 companies from a variety of industries. It identifies leading practices and points of interest to assist reporting entities as they develop their future fair value disclosures. The companies we sampled are from a variety of industries, including (1) financial services - banking and capital markets, asset management, and insurance, and (2) other industries - utilities, energy, manufacturing, and real estate.
In brief
In brief: FASB Chairman provides status update on insurance contracts project (No. 2012-14)6/7/12 | Assurance services
At the June 5 meeting of the Financial Accounting Standards Advisory Council (FASAC), as clarified at a subsequent FASB education session, FASB Chairman Leslie Seidman provided an update on the status of the insurance contracts project. She indicated that
- Power and Utilities Alert 2012-5: Accounting for rate-regulated activities under IFRS
6/4/12 | Power & utilities
The January 2012 meeting of the International Financial Reporting Standards (IFRS) Interpretations Committee (the Committee) raised questions whether under IFRS customers within a regulatory jurisdiction can be combined into a single unit of account and how to recognize assets and liabilities.
- Potential Accounting Implications of Supreme Court Decision on the Affordable Care Act
5/31/12 | Pharmaceuticals & life science
The Supreme Court heard arguments concerning the Affordable Care Act in March 2012 and expects to issue its decision on the constitutionality of the Affordable Care Act by the end of June 2012. If the law should be invalidated by the Supreme Court, either in whole or in part, there could be significant accounting and financial reporting implications. This PwC Pharmaceutical and Life Sciences Industry Alert focuses on the potential accounting implications of the Supreme Court decision on the Affordable Care Act.
Dataline
Dataline: Responses are in on the re-exposed proposed revenue standard -- Constituents voice their support...and concerns (No. 2012-04)5/31/12 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contracts with Customers, on November 14, 2011. The boards received approximately 360 comment letters in response to the updated exposure draft, down significantly from the nearly 1,000 comment letters received on the exposure draft released in June 2010. Since issuing the updated exposure draft, the boards have continued extensive outreach efforts, including four public and numerous private, industry-focused roundtables. This PwC Dataline addresses the areas of focus in roundtables and in comment letters received by the boards on the updated exposure draft.
In brief
In brief: FASB and IASB redeliberate lessee accounting - May 2012 (No. 2012-13)5/25/12 | Assurance services
Read this commentary on the February 2012 FASB and IASB deliberations on lessee accounting, from PwC's CFOdirect Network.
In brief
In brief: FASB and IASB agree to principles-based definition for investment companies (No. 2012-12)5/24/12 | Assurance services
The FASB and IASB met on May 21, 2012 to redeliberate the investment company definition project for the first time. The boards considered two items: (1) whether the IASB will continue with an entity-based approach or apply an asset-based approach and (2)
In brief
In brief: Financial Accounting Foundation announces new council to improve standard setting for private companies (No. 2012-11)5/23/12 | Assurance services
Today, the Financial Accounting Foundation (FAF) approved a plan establishing a council to improve the standard-setting process for private companies. The FAF's plan is generally consistent with its original proposal issued in October, but it includes sev
In brief
In brief: FASB and IASB agree on a three-category financial asset classification and measurement approach (No. 2012-10)5/22/12 | Assurance services
This week, the FASB and IASB (the boards) continued their joint discussions on classification and measurement of financial assets and agreed on a three-category approach for eligible debt investments. The three categories are (1) amortized cost, (2) fair
Podcast
Podcast: Build to suit leaseAssurance services
The first quarter 2012 'Current Accounting and Reporting Developments' webcast on March 21, 2012 included a discussion on build to suit leases, led by Chad Soares. This segment of the webcast is now available for podcast download.
- Issues and solutions for the retail and consumer goods industries
5/15/12 | Retail & consumer
This report discusses accounting topics common to retail and consumer companies. Issues covered range from those related to R&D all the way through to sales to the end customer. Each discussion provides background, accounting guidance, a solution and a comparison between US GAAP and IFRS.
- Making sense of a complex world: Accounting for royalty arrangements – issues for media companies
5/10/12 | Entertainment & media
Challenges under IFRS in accounting for royalty arrangements by both licensors and licensees.
- Potential Accounting Implications of Upcoming Supreme Court Decision on the Affordable Care Act
5/3/12 | Human resource services
The Supreme Court heard arguments concerning the Affordable Care Act (ACA) in March. A decision is expected to be released sometime before the Court recesses on June 30. Management and boards of directors may wish to consider potential implications (and possible impact on and strategies of providing health care benefits) in advance of the Supreme Court's ruling, as the time to address such changes in the June 30 reporting period may be short. This HRS insight highlights some of the key areas that could be affected.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Testing Indefinite-Lived Intangible Assets4/30/12 | Assurance services
PwC generally supports the use of a qualitative assessment that could result in an entity not having to measure the fair value of an indefinite-lived intangible asset in certain circumstances, such as when the asset's recently calculated fair value substantially exceeded its carrying amount and no significant adverse changes have since occurred.
Accounting guides
Guide to Accounting for Fair Value Measurements; Incorporating ASU 2011-04 - 2012 edition4/25/12 | Assurance services
Fair value accounting continues to be a topic of significant interest and debate. With unprecedented market events, turmoil in the credit markets and a severe downturn in the global economy in recent years, discussion of fair value has intensified among the preparers and users of financial information. This discussion has made clear the need for consistent fair value measurements in a global market. PwC is pleased to offer the 2012 edition of this guide to help reporting entities meet the challenges of applying the key accounting and reporting standard related to fair value measurements, Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820).
M&A snapshot
Don't let push-down accounting push you around (M&A snapshot)4/25/12 | Assurance services
Companies preparing to go public often face a number of issues related to their financial statements. A common issue is whether push-down accounting should be applied. Push-down accounting is the practice of adjusting the standalone financial statements of an acquired company to reflect the basis of accounting of the buyer. This edition of Mergers & acquisitions - a snapshot, provides an overview of the SEC's rules on push-down accounting and a high-level summary of the complexities and opportunities that can arise in applying the rules to common deal structures.
Podcast
PwC's Professional Development Program podcast seriesAsset management
This PwC podcast series focuses on the latest technical developments in the financial services industry and what those developments mean for you. Topics for podcasts range from broad financial services industry specific issues such as actuarial or banking to technical issues related to financial statement presentation resulting from new accounting standards/pronouncements, recently issued tax regulations, and IRS practice and procedure issues.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Transition Guidance - Proposed amendments to IFRS 104/12/12 | Global accounting consulting services
PwC global network of firms agrees with the relief provided in the exposure draft with regards to the transition guidance in IFRS 10. However, the firm believes that the effect of the BoardÆs proposed relief is complicated to implement in practice. ...
- Greece Debt Restructuring
4/9/12 | Pharmaceuticals & life science
In February 2012, the Greek government announced a debt restructuring which required holders to exchange their two-year and three-year bonds, currently scheduled to mature in December 2012 and 2013, for new non-interest bearing government bonds with longer maturities and a reduced redemption value. This edition of PwC's Pharmaceutical and Life Sciences Industry Alert discusses why pharmaceutical companies will need to evaluate the debt restructuring in order to properly assess the accounting impact of this event.
- Key tax accounting considerations of further reductions to the United Kingdom's main corporate tax rate
4/5/12 | Tax accounting services
The UK has announced further amendments to the main corporate tax rate -- the rate applicable from April 1, 2012 to March 31, 2013 will be reduced from 25% to 24% and a further rate reduction to 23% will be applicable from April 1, 2013. This issue of Tax accounting insights discusses why multinational groups with UK entities are encouraged to assess the tax accounting implications of these tax rate changes.
Practical tip
Practical tip: Disclosing total comprehensive income in condensed consolidating financial information and parent company-only financial information (Revised May 3, 2012*) (No. 2012-01)4/4/12 | Assurance services
Upon adoption of the FASB's new comprehensive income presentation requirements (ASUs 2011-05 and 2011-12), an entity should report a total for comprehensive income in condensed consolidating financial information and parent company-only financial information in a single continuous statement or in two separate, but consecutive, statements. This Practical tip further explains this guidance and includes examples to help you apply it in practice.
- Disclosure management: Streamlining the Last Mile
3/21/12 | Assurance services
Current manual report assembly and review processes can be enhanced through effective implementation of Disclosure Management applications. Disclosure Management applications enable streamlining of current "Last Mile" manual report assembly and review processes. Companies can increase net benefits by gaining a clear understanding of common reporting process enhancements.
Tax accounting insights
Key areas of focus when accounting for income taxes during interim periods3/21/12 | Tax accounting services
At the close of every quarter, companies recognize income tax expense or benefit in their respective quarterly financial statements in accordance with interim reporting guidance under FASB Accounting Standards Codification 740, Income Taxes (ASC 740). When applied, this accounting model can present formidable challenges to many companies and can sometimes produce unexpected results. This edition of Tax accounting insights highlights the "basics" as well as key areas of focus when accounting for income taxes during interim periods.
EITF observer
EITF observer: A meeting synopsis - March 20123/18/12 | Assurance services
At the EITF's March 15 meeting, the EITF discussed six Issues, reaching a consensus-for-exposure on three Issues. The remaining three Issues will be discussed further at a future meeting.
PwC comment letter (FASB)
PwC Comments on FASB and IASB Exposure Draft - Revenue from Contracts with Customers3/14/12 | Assurance services
PwC agrees with the boards' objectives and supports a single revenue recognition model that provides clearer and more consistent guidance. PwC supports the overall project. There are, however, areas where the concepts could be more clearly articulated, might be challenging to apply, or do not appear cost-beneficial. In the letter, these areas are explained in the firm's responses to the boards' questions, including responses to the FASB's questions on the US GAAP consequential amendments.
- Power and Utilities Alert: 2012- 3
3/2/12 | Power & utilities
Fair value measurements have come under discussion and review by the Public Company Accounting Oversight Board (PCAOB) due to accounting guidance, changes in economic environments, financial instruments and valuation models. Recent SEC remarks have focused on management's responsibilities on using information from third party pricing services in fair value measurements and disclosures.
Podcast
Engineering & construction industry podcast series: Part threeIndustrial products
Current lease accounting is considered to be broken, most significantly for lessees. The method is complex and the dividing line between operating and finance leases is a "bright line" rule rather than being principles-based. The new proposed lease accounting rules aim to eliminate off-balance sheet accounting. In addressing these proposed rules, PwC's Engineering & Construction practice has released a new podcast to outline recent updates relating to the FASB/IASB joint lease project as well as the business and systems implications it has on engineering and construction companies.
Podcast
Engineering & Construction industry podcast series: Parts one & twoIndustrial products
The model for revenue recognition is changing and this may have a significant impact on the Engineering and Construction industry. In addressing these new standards, PwC's Engineering & Construction practice has developed a podcast series to outline the proposed changes in standards and help companies in the industry understand how these proposals may impact them.
Podcast
PwC's Professional Development Program podcast series - Loan Loss ReservesAsset management
In this podcast, PwC Advisory managing director Mike Shearer discusses an overview of the allowance for loan losses. The podcast provides background on some of the common industry methods used to estimate the allowance, including the approaches used by practitioners to address challenges experienced in the most recent economic cycle.
Dataline
Dataline: New fair value measurement standard -- Implementation guidance for new disclosure requirements (No. 2012-02)2/27/12 | Assurance services
In May 2011, the FASB issued Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (the ASU). The ASU resulted from a joint project with the International Accounting Standards Board (IASB). The IASB also issued IFRS 13, Fair Value Measurement, in May 2011. Many of the changes to existing fair value measurement guidance represent clarifications and are intended to align U.S. GAAP and IFRS. However, certain of the amendments to U.S. GAAP are substantive and several new disclosures are required. This Dataline includes a series of questions and answers providing implementation guidance on selected new disclosure...
- Preparing carve-out financial statements - Navigating the financial reporting challenges
2/16/12 | Transaction services
Preparing carve-out financial statements can be a challenge. The need for data and numerous judgments can be a struggle, especially given scant guidance. Substantial care must be taken to confirm that all of the assets and liabilities of the separate business have been properly identified and that all relevant costs of doing business have been reflected in the carve-out financial statements. With the limited specific guidance covering carve-out financial statements, being aware of current practice will help sellers navigate the divestiture process.
PwC comment letter (FASB)
PwC Comments on Proposed ASU, Consolidation (Topic 810) - Principal versus Agent Analysis2/16/12 | Assurance services
PwC supports the FASB and IASB's efforts to develop an approach for assessing whether a decision maker is using its decision-making authority in a principal or an agent capacity. However, consolidation is only one of two important elements needed to achieve convergence in the recognition of financial assets and liabilities by financial entities. PwC's preference is for the Boards to work together to reach a converged solution for all aspects of recognition, including considering their respective guidance for derecognition of financial instruments.
PwC comment letter (FASB)
PwC Comments on Proposed ASU, Real Estate - Investment Property Entities (Topic 973)2/16/12 | Assurance services
PwC does not believe that measuring all real estate investments at fair value will necessarily yield better reporting for all types of investors. However, we do believe that fair value for entities that are fundamentally investing entities, as opposed to operating entities, would provide more relevant information to users of financial statements. Further, even among investing entities that account for their real estate investments at fair value, significant diversity in application exists with respect to presentation, measurement, consolidation and disclosure.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Financial Services - Investment Companies (Topic 946)2/16/12 | Assurance services
PwC is concerned about the significant differences between the Boards' respective proposals. For example, the Boards' differ in their proposed treatment of a controlling financial interest in an investment company held by a non-investment company parent. PwC believes that such significant differences should be eliminated in order to achieve a truly converged standard.
- Preparing for participant-level fee disclosures
2/6/12 | Human resource services
On October 20, 2010, the U.S. Department of Labor (the "DOL") released a new regulation requiring ERISA plan sponsors to provide for more comprehensive participant-level fee disclosures. Although the party responsible for complying with the new DOL Regulation is plan sponsors, plan recordkeepers and financial institutions associated with plans' investment options should be prepared to provide assistance so that the required information is available for plan sponsors to satisfy the disclosure requirements mandated by the DOL Regulation.
Dataline
Dataline: Presentation of comprehensive income -- Applying the FASB's final standard on presenting comprehensive income after deferral of the reclassifications requirement (No. 2012-01)1/19/12 | Assurance services
The FASB issued a final standard in June 2011 requiring entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. In response to concerns from some preparers, the FASB issued an amendment in December 2011 to indefinitely defer one of the requirements contained in its June 2011 final standard. That requirement called for reclassification adjustments from accumulated other comprehensive income to be measured and presented by income statement line item in net income and also in other comprehensive income. In Dataline 2011-24 we discussed the final standard as originally issued. Now that the FASB has...
- Power and Utilities Alert 2012-01: 2011 SEC comment letter trends for the power and utilities industry
1/15/12 | Power & utilities
A key consideration in financial reporting delivering transparent financial information to investors. 2011 SEC comment letter trends for the power and utilities industry is based on a review of industry related comment letters on Form 10-Ks and Form 10-Qs published in 2011.
- Power and Utilities Alert 2012-2: 2011 technical update for the power and utilities industry
1/15/12 | Power & utilities
This 2011 technical update addresses accounting issues impacting power generators and utilities to support senior accounting and financial reporting staff for 2011 year-end financial reporting It includes a discussion of anticipated future financial reporting issues that power and utility companies should consider.
- Power and Utilities alert: 2011-07
1/12/12 | Power & utilities
PwC's Power and Utilities Alert highlights key issues and considerations in addressing the potential accounting implications for the Revenue from Contracts with Customers exposure draft, including areas that are consistent with the Boards' original proposal but require additional focus as the potential issuance date moves closer.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Investment Entities1/12/12 | Global accounting consulting services
PwC global network of firms welcomes the IASB's approach to provide differentiated fair value reporting for qualifying investment entities. The Firm, however, is concerned that there are significant differences between the IASB and FASB's respective proposals. The Firm believes that the Boards' differing approaches to the treatment of a controlling financial interest in an investment entity by a non-investment entity parent should be eliminated.
- European Economic Environment - US GAAP Accounting Considerations
1/11/12 | Pharmaceuticals & life science
There continues to be significant economic problems in some European countries that are members of the single currency (the Euro zone) as well as potential uncertainty about the single currency itself. This Pharma and Life Sciences Alert discusses why austerity programs aimed at reducing debt levels in these countries have not eliminated the possibility that some European countries could default on sovereign debt and other governmental obligations.
Tax accounting insights
Income Tax Accounting, A comparative look between US GAAP and IFRS1/5/12 | Tax accounting services
Significant differences continue to exist between the IASB's anf the FASB's income tax accounting models, notwithstanding ongoing convergence efforts. This PwC publication provides a comparative summary between standards and a closer look at seven significant differences -- tax basis, initial recognition, intercompany transactions, accounting for uncertain tax positions, allocating income taxes, share-based compensation, and investment in subsidiaries.
PwC comment letter (FASB)
PwC Comments on FAF's Plan to Establish the Private Company Standards Improvement Council12/21/11 | Assurance services
PwC strongly supports FAF's plan to create the Private Company Standards Improvement Council and to maintain FASB as the sole authoritative standard-setting board for public and private companies. The Foundation's plan is the appropriate response to the private company financial reporting community's concerns about the relevance, growing complexity, and costs of compliance associated with U.S. GAAP.
Dataline
Dataline (Supplement): Revenue from contracts with customers - Automotive industry (No. 2011-35)12/19/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the automotive industry.
Dataline
Dataline: Highlights of the 2011 AICPA National Conference on Current SEC and PCAOB Developments (No. 2011-37)12/15/11 | Assurance services
The 2011 AICPA National Conference on Current SEC and PCAOB Developments was held on December 5, 6, and 7, 2011. Similar to prior years, the Conference hosted representatives from regulators and standard setters, along with auditors, users, preparers, and industry experts who expressed views on a wide range of important accounting, auditing, and financial reporting topics. We provide you highlights of the topics discussed at the Conference in this Dataline.
M&A snapshot
Did I buy a group of assets or a business? Why should I care? (M&A snapshot)12/14/11 | Assurance services
Determining whether an acquired group of assets is a business has proven to be one of the more challenging aspects of applying the current M&A accounting guidance. For many transactions, the determination will be straightforward. However, the current guidance will cause many transactions that are "on the edge," and previously would have been accounted for as asset acquisitions, to be accounted for as business combinations. This edition identifies relevant considerations in determining whether a business has been acquired and why it matters not only upon acquisition but also for disposals and public company reporting.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Technical Corrections12/13/11 | Assurance services
PwC supports the Board's efforts to clarify the Codification, correct unintended application of guidance, and conform the use of the term fair value throughout the Codification. PwC generally agrees with the proposed changes and believes they meet the project's objective to improve the Codification. PwC provides some observations on several amendments that it believes require further consideration or clarification.
PwC comment letter (IASB)
PwC Comments on Request for views: Agenda Consultation 201112/13/11 | Global accounting consulting services
PwC global network of firms provides detailed responses to the questions included in the Agenda Consultation. The Firm also notes some of the broader issues that it believes the Trustees and the IASB should consider when establishing the agenda of the IASB.
- 2011 US IFRS outlook survey: Companies' thoughts on the best timing and methods for incorporating IFRS into the US financial reporting system
12/8/11 | US GAAP & IFRS Convergence
2011 US IFRS outlook survey: Companies' thoughts on the best timing and methods for incorporating IFRS into the US financial reporting system
Dataline
Dataline (Supplement): Revenue from contracts with customers - Entertainment and media industry (No. 2011-35)12/7/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the entertainment and media industry.
Dataline
Dataline: SEC Staff continue progress on IFRS work plan -- Comparison between IFRS and US GAAP frameworks and analysis of IFRS in practice (No. 2011-36)12/6/11 | Assurance services
On November 16, 2011, the SEC's Office of the Chief Accountant (the SEC Staff) published two staff papers. The first summarizes differences between the US GAAP and IFRS frameworks, and the second analyzes how IFRS is applied in practice. The papers were published pursuant to the SEC StaffÆs work plan to analyze considerations relevant to the Commission's decision on whether, when, and how IFRS might be incorporated into the US financial reporting system. This Dataline provides a summary of selected differences between US GAAP and IFRS noted in the first paper. It also summarizes the Staff's key observations included in the second paper on how IFRS is applied in practice. ...
Dataline
Dataline (Supplement): Revenue from contracts with customers - Pharmaceutical and life sciences industry (No. 2011-35)12/1/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the pharmaceutical and life sciences industry.
Dataline
Dataline (Supplement): Revenue from contracts with customers - Retail and consumer industry (No. 2011-35)12/1/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the retail and consumer industry.
PwC comment letter (IASB)
PwC Comments on Draft IFRS for SMEs Interpretation of "Undue Cost or Effort" and "Impracticable" (General, Issue 2)11/29/11 | Global accounting consulting services
PwC global network of firms strongly believes that the Implementation Group should not issue a Q&A that addresses the interpretation of "undue cost or effort" and/or "impracticable." The Firm believes that the SMEIG should not address through Q&As issues that might be relevant to full IFRS. The Firm notes that the SMEIG might use the "basis for conclusions" in the Q&As to limit the scope of the non-mandatory guidance, but there remains a danger that the Q&As might be considered in the interpretation of full IFRS, particularly in areas in which there is no guidance in full IFRS.
Dataline
Dataline: Revenue from contracts with customers -- The proposed revenue standard is re-exposed (revised January 3, 2012) (No. 2011-35)11/22/11 | Assurance services
The FASB and IASB (the "boards") released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011 and are requesting comments by March 13, 2012. The boards have asked whether the proposed guidance is clear, and requested feedback specifically on: performance obligations satisfied over time; presentation of the effects of credit risk; recognition of variable consideration; the scope of the onerous performance obligation test; interim disclosures; and transfer of nonfinancial assets that are outside an entity's ordinary activities (for example, sale of PP&E). It is unclear when a final standard will be issued; however, the boards have indicated that the final standard will have an effective date no...
Dataline
Dataline (Supplement): Revenue from contracts with customers - Telecommunications industry (No. 2011-35)11/22/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the telecommunications industry.
Dataline
Dataline (Supplement): Revenue from contracts with customers - Transportation and logistics industry (No. 2011-35)11/22/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the transportation and logistics industry.
Dataline
Dataline (Supplement): Revenue from contracts with customers - Technology industry (No. 2011-35)11/22/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the technology industry.
Dataline
Dataline (Supplement): Revenue from contracts with customers - Industrial products and manufacturing industry (No. 2011-35)11/22/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the industrial products and manufacturing industry.
Dataline
Dataline (Supplement): Revenue from contracts with customers - Engineering and construction industry (No. 2011-35)11/22/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the engineering and construction industry.
Dataline
Dataline (Supplement): Revenue from contracts with customers - Aerospace and defense industry (No. 2011-35)11/22/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the aerospace and defense industry.
Dataline
Dataline (Supplement): Revenue from contracts with customers - Asset management industry (No. 2011-35)11/22/11 | Assurance services
The FASB and IASB released an updated exposure draft, Revenue from Contract with Customers, on November 14, 2011, and are requesting comments by March 13, 2012. In Dataline 2011-35, we share our analysis of and insight on the overall proposal. This industry supplement to Dataline 2011-35 provides specific examples and assessments of the potential affect of the updated proposal on the asset management industry.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-0511/21/11 | Assurance services
PwC supports the FASB's decision to indefinitely defer the requirement in ASU 2011-05 to measure and present reclassifications from accumulated other comprehensive income to net income by income statement line item in net income and also in other comprehensive income.
Dataline
Dataline: Consolidation of VIEs and partnerships--more changes under consideration -- FASB proposes to require principal versus agent analysis (No. 2011-33)11/17/11 | Assurance services
On November 3, 2011, the FASB issued an exposure draft proposing changes to the consolidation accounting guidance for variable interest entities (VIEs) and partnerships that are not VIEs. A reporting entity that has a variable interest in a VIE and decision-making authority would need to assess whether it uses its decision-making authority to act in a principal or an agent capacity. A decision maker determined to be an agent would not consolidate the entity. In addition, the presumption that a general partner controls a partnership that is a voting interest entity (VOE) can be overcome by applying the same principal versus agent assessment and determining that the general partner is using its power in an agent capacity. This Dataline...
Dataline
Dataline: Investment property entities -- The good, the bad and the ugly (No. 2011-34)11/17/11 | Assurance services
On October 21, 2011, the FASB issued an exposure draft related to investment property entities ("IPEs"). The proposal could impact financial reporting not only for traditional real estate investors, but also non-traditional real estate/integral equipment owners, such as power plants, cell towers, and pipelines. In this Dataline, we share our insight and analysis of the proposal.
Dataline
Dataline: Investing in a new investment company definition -- FASB proposes to align investment company definition with IFRS proposal (No. 2011-32)11/8/11 | Assurance services
On October 21, 2011, the FASB issued a proposal to (1) amend the criteria for determining whether an entity is an investment company and (2) address when an investment company should apply consolidation accounting. The proposal would apply to an entity's interim and annual reporting periods in fiscal years that begin after the effective date, which has not been determined. Comments on the FASB's proposal (and a related proposal issued by the IASB) are due January 5, 2012. This Dataline takes a look at the key provisions of the proposal and shares our observations on it.
EITF observer
EITF observer: A meeting synopsis - November 201111/4/11 | Assurance services
At the November 3, 2011 EITF meeting, the Task Force discussed two Issues, reaching a final consensus on one Issue (10-E) and consensus-for-exposure on one Issue (11-A). If the final consensus is ratified by the Financial Accounting Standards Board (FASB) at its November 16, 2011 meeting, the related Accounting Standards Update (ASU) will amend the FASB Accounting Standards Codification (ASC) and become final authoritative accounting guidance.
- IFRS pocket guide 2011
10/27/11 | Global accounting consulting services
This PwC publication provides a summary of the recognition and measurement requirements of IFRS issued up to August 2011. This quick-reference guide is intended for a variety of audiences, including finance directors, financial controllers and other members of the finance team, as well as broader management, actuaries, lawyers, merchant bankers and analysts.
Dataline
Dataline: A look at the new IFRS consolidation standard and how it compares to US GAAP -- Many aspects of the IASB's consolidation guidance are now converged with US GAAP (revised November 15, 2011*) (No. 2011-29)10/27/11 | Assurance services
The IASB released IFRS 10, Consolidated Financial Statements, in May 2011, introducing new guidance on when investors will have to consolidate investees. Many aspects of the new guidance are now converged with U.S. GAAP. The new approach combines the concepts of power to control and exposure to variable returns in the determination of whether control exists, and whether consolidation is required. This Dataline takes an in-depth look at the new guidance in IFRS 10. It includes numerous examples and illustrations to help you get up to speed quickly on the new approach.
Dataline
Dataline: New fair value measurement standard -- Implementation guidance for key changes to the measurement of financial instruments at fair value (revised March 1, 2012*) (No. 2011-31)10/27/11 | Assurance services
In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. Many of the changes to existing fair value measurement guidance represent clarifications and are intended to align U.S. GAAP and IFRS. However, certain of the amendments to U.S. GAAP are substantive and require analysis of current practice. This Dataline provides implementation guidance on certain aspects of the ASU, specifically regarding the fair value measurement of financial instruments, including (1) the application of premiums and discounts, (2) measuring the fair value of financial instruments with offsetting market and credit risks, and (3) the...
Dataline
Dataline: Accounting for derivative instruments -- Treasury and financial reporting implications of using an OIS (not LIBOR) curve in the valuation of certain derivatives (No. 2011-30)10/27/11 | Assurance services
Methodologies utilized to value derivative instruments continue to evolve, even for "plain vanilla" products. Some derivatives dealers have begun exploring valuing certain derivatives using an overnight index swap ("OIS") curve to discount the cash flows, rather than the LIBOR swap curve that has been used in the past. Derivatives to be valued using the OIS curve include collateralized derivatives and derivatives cleared through a central clearing house. This new method of valuation is the latest in a series of changes in recent years, which if implemented will result in changes for derivatives dealers across all aspects of their organizations and also for the counterparties to these trades. This Dataline addresses...
- Reducing goodwill impairment testing costs: PwC
10/26/11 | Transaction services
The Financial Accounting Standards Board (FASB) approved a qualitative assessment that simplifies annual goodwill impairment testing under ASC 350 (FAS 142). PwC's implementation guidelines help reduce costs.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Improvements to International Financial Reporting Standards10/26/11 | Global accounting consulting services
PwC global network of firms agrees in in principle with the proposed improvements. PwC global network provides its responses to the specific questions in the proposal, including suggestions to clarify the proposed wording of several of the proposed improvements.
PwC comment letter (IASB)
PwC Comments on Exposure draft: Mandatory Effective Date of IFRS 910/26/11 | Global accounting consulting services
PwC global network of firms welcomes the decision of the Board to delay the mandatory effective date of IFRS 9. However, PwC global network questions whether the proposed date of January 1, 2015, will be enough of a delay. The firm believes that the Board should allow for a period of at least 18 months from the date of the finalizing IFRS 9 and the insurance project to the first comparative period covered by the new standard. Given that it does not appear that these projects will be completed before the second half of 2012, PwC global network recommends that the Board considers whether the proposed date is realistic in view of the most likely time line for the projects.
PwC comment letter (IASB)
PwC Comments on Tentative agenda decision: IAS 12 Income taxes - rebuttable presumption to determine the manner of recovery10/26/11 | Global accounting consulting services
PwC global network of firms does not support the tentative agenda decision as drafted. The firm supports the committee's conclusion that this item should not be taken onto the agenda. The firm also supports the committee's conclusion that the presumption in paragraph 51C of IAS 12,'Income taxes can be rebutted in other circumstances, which is based on the guidance in IAS 12. However, the final two sentences of the tentative agenda decision contain an interpretation of IAS 12 that is not supported by the guidance in the standard.
PwC comment letter (IASB)
PwC Comments on Tentative agenda decision: IAS 12 Income taxes - Corporate wrapper10/26/11 | Global accounting consulting services
PwC Global Network of Firms does not support the tentative agenda decision as drafted. The Firm supports the Committee's conclusion that this item should not be taken onto the agenda because it raises fundamental questions about the principles in IAS 12 that should be addressed by the IASB.
- New disclosures for multiemployer pension plans will be required this year
10/23/11 | Human resource services
Responding to concerns regarding the poor funding levels of many defined benefit multiemployer pension plans, as well as the lack of information on these plans in financial filings, the Financial Accounting Standards Board (FASB) recently issued a final standard significantly revising the disclosure requirements for participating employers. HRS insight discusses how the new disclosures will be effective for annual periods ending after December 15, 2011 for public entities, with a one year deferral for non-public entities.
- The impact of "Deal of the Day" offers on retail & consumer products companies
10/20/11 | Retail & consumer
The Deal Coupon industry has grown significantly in recent years, especially with the growth of mobile on-line access. On-line Deal Coupons have become a popular marketing tool to attract consumers and sell goods and services. R&C companies should be aware of potential accounting, tax and business considerations when transacting business via Deal Companies.
Point of view
Point of view: The path forward for international standards in the United States: Considering possible alternatives10/6/11 | Assurance services
The SEC announced plans for the future use of international financial reporting standards (IFRS) by US public companies. Completion of the current convergence agenda, enhanced cooperation among capital market securities regulators, and a refocused international interpretations body will provide a basis for a single set of high-quality global accounting standards.
Dataline
Dataline: Goodwill impairment -- FASB issues guidance that simplifies goodwill impairment test and allows early adoption (No. 2011-28)9/29/11 | Assurance services
The FASB issued ASU 2011-08, Testing Goodwill for Impairment (the revised standard) on September 15, 2011. The revised standard is intended to reduce the cost and complexity of the annual goodwill impairment test by providing both public and nonpublic entities with the option of performing a "qualitative" assessment to determine whether further impairment testing is necessary. The revised standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted for certain companies. This Dataline provides details and insights on the revised standard.
M&A snapshot
Market participants: how their views impact your values (M&A snapshot)9/26/11 | Assurance services
In a business combination, buyers are required to record the acquired assets and assumed liabilities of a business at their fair values. Fair value reflects the price that market participants would receive to sell an asset or pay to transfer a liability. Assets and liabilities may be used differently by different market participants, resulting in variations in values. Therefore, a market participant's view is an important aspect of the valuation process as a buyer cannot look only to its own intended use of an asset or its ability to transfer a liability at a certain price. This publication provides insight on the identification of market participants, as well as how entities can develop market participant assumptions.
Dataline
Dataline: Financial reporting considerations stemming from an uncertain global economy -- Accounting and reporting observations (No. 2011-27)9/15/11 | Assurance services
In recent months, capital markets and currency exchanges have experienced significant volatility. The downgrade of long-term U.S. Treasuries, the European debt crisis, and slowing gross domestic product (GDP) growth in the world's leading economies have contributed to an uncertain global economy. Companies should consider the impact of the changing economic environment on their accounting and financial reporting and monitor areas of their business that might be affected by an economic slowdown. This Dataline discusses the key areas of financial reporting that could be impacted by a broader economic slowdown.
Practical tip
Practical tip -- Interim period determination of tax expense or benefit when a company reports discontinued operations (No. 2011-04)9/15/11 | Assurance services
In a company's annual financial statements, a three-step incremental approach -- commonly referred to as a "with and without" approach -- is used to allocate the annual period's tax provision (benefit) to continuing operations and other components of comprehensive income and shareholders' equity. This Practical tip summarizes the considerations and provides an example of applying the "with and without" model in interim periods.
PwC comment letter (AICPA)
PwC Comments on Proposed Principles and Criteria for XBRL-Formatted Information8/11/11 | Assurance services
PwC supports the AICPA Assurance Services Executive Committee's decision to develop a set of principles and criteria to evaluate information formatted in XBRL. PwC recommends, however, before finalizing the principles and criteria, the AICPA discuss with the SEC whether the SEC would accept examination reports using the principles and criteria given that they are not meant to be the criteria for evaluating compliance with SEC rules, and also evaluate whether additional feedback from preparers and users should be obtained. PwC also suggested some changes to the principles and criteria.
PwC comment letter (IASB)
PwC Comments on the IFRS Foundation Trustees' Strategy Review8/4/11 | Global accounting consulting services
PwC Global Network of Firms (1) provides some overall observations on what the Firm considers to be important issues connected with the IFRS Foundation Trustees' Strategy Review and (2) shares its views on the specific principles and recommendations proposed by the Trustees with respect to the organization's (1) mission, (2) governance, (3) due process, and (4) funding.
PwC comment letter (SEC)
PwC Comments on SEC Staff Paper: Exploring a Possible Method of Incorporation of IFRS8/4/11 | Assurance services
PwC commends the SEC staff for their continued, thorough evaluation of whether, when and how IFRS should be incorporated into the US financial reporting system. PwC continues to support a vision of a single set of high-quality, global accounting standards that are consistently applied, and the Firm believes that IFRS provides the best basis for achieving this vision. In PwC's opinion, further improvements are still required in the quality of accounting standards and more work is required by standard setters, preparers, auditors, and key capital market securities regulators to improve the consistency of IFRS application. PwC also believes that the endorsement approach described in the staff paper is a fair starting point from which to...
Point of view
Point of view: Accounting for income taxes: It's time for a comprehensive review7/28/11 | Assurance services
Recent changes in economic, regulatory, tax legislative, and accounting standard setting environments require a comprehensive review to reduce tax accounting complexity while improving the relevance and quality of the reporting.
Dataline
Dataline: Accounting for certain equity-linked financing transactions (No. 2011-25)7/7/11 | Assurance services
Many companies, public and private, issue equity-linked securities for a variety of reasons, including obtaining capital to fund current liquidity needs and expand future operations. Including equity-linked features in a financing transaction frequently enables companies to lower cash interest costs due to the value of the equity-linked feature. This Dataline is intended to assist companies in evaluating the accounting for equity-linked financing transactions at issuance and on an ongoing basis.
Dataline
Dataline: Financial instruments -- An update on the FASB's financial instruments project redeliberations as of June 30, 2011 (No. 2011-26)7/7/11 | Assurance services
The accounting for financial instruments is a priority joint project of the FASB and IASB; however, the FASB and IASB have reached different conclusions on many aspects of the project to date. This PwC Dataline provides an update on the FASB's rediberations as of June 30, 2011.
- Accounting for Pension Buy-In Arrangements
6/29/11 | Human resource services
The first pension "buy-in" contract was recently purchased by a U.S. pension plan. This buy-in arrangement is similar to a traditional non-participating annuity (a "buy-out"), where a plan transfers future responsibility for promised employee retirement benefits to an insurance company. Under the buy-in arrangement, however, the benefit obligation is not transferred to the insurer. Instead, the plan remains responsible for paying the benefits, but purchases a contract from the insurer which generates returns designed to equal all future benefits payments to covered participants.
Dataline
Dataline: Presentation of comprehensive income -- The FASB issues final standard on presenting other comprehensive income (Superseded by Dataline 2012-01 on 01/19/2012) (No. 2011-24)6/28/11 | Assurance services
The FASB has issued a final standard (ASU 2011-05) requiring entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. The option to present items of other comprehensive income in the statement of changes in equity is eliminated. This Dataline takes a look at the new guidance.
EITF observer
EITF observer: A meeting synopsis - June 20116/24/11 | Assurance services
At the June 23, 2011 EITF meeting, the Task Force discussed three Issues, reaching final consensuses on two Issues (Issue 09-H and Issue 10-H) and consensuses-for-exposure on one Issue (Issue 10-E). If the final consensuses are ratified by the FASB at its July 13, 2011 meeting, the related Accounting Standards Updates (ASUs) will amend the FASB Accounting Standards Codification (ASC) and become final authoritative accounting guidance.
Point of view
Point of view: Reducing complexity: Our proposal to address this challenge6/24/11 | Assurance services
Many U.S. accounting standards are more complex than necessary to meet the standard-setter's objective of issuing high-quality standards. Complexity imposes costs on both investors and companies for information that is often neither easily understood nor particularly useful. Opportunities exist to maintain, or even increase, the quality of accounting standards while reducing complexity.
PwC comment letter (IASB)
PwC Comments on Draft Q&As: IFRS for SMEs Section 1 - Issues 3 and 46/21/11 | Global accounting consulting services
PwC network of firms believes that the SMEIG should not address through Q&As issues that might be relevant to full IFRS. There is a danger that the Q&As, although not mandatory and specific to the IFRS for SMEs (the standard), might be applied in the interpretation of full IFRS. PwC does not believe this to be appropriate, and believes Q&As issued by the SMEIG should be restricted to issues that affect the IFRS for SMEs only.
PwC comment letter (IASB)
PwC Comments on IAS 19 Defined Contribution Plans with Vesting Conditions6/21/11 | Global accounting consulting services
PwC network of firms expressed concern that the draft agenda decision does not take into account the wide range of conditions that can arise in employee benefit plans and as a result presents a conclusion that is too definitive and might lead to inappropriate accounting.
Practical tip
Practical tip: Deferred tax accounting implications of holding gains from obtaining control of a foreign investee (No. 2011-03)6/16/11 | Assurance services
When a company obtains control of a foreign investee, it remeasures its previously held equity interest to fair value and recognizes a holding gain in income. This holding gain will generally not result in a current tax event. This Practical tip explains the requirement to freeze any previously recorded deferred tax liability and an accounting policy election that may be available in relation to recording deferred taxes on such holding gains.
Dataline
Dataline: Fair value measurement -- FASB and IASB complete joint project (No. 2011-23)6/9/11 | Assurance services
In May 2011, the FASB and IASB completed their joint project on fair value measurement and issued their respective final standards. The joint project was part of the Memorandum of Understanding between the FASB and IASB. The objective of the project was to bring together as closely as possible the fair value measurement and disclosure guidance issued by the two boards. The issuance of the final standards results in global fair value measurement and disclosure guidance and minimizes differences between U.S. GAAP and IFRS. This PwC Dataline describes the key changes to U.S. GAAP as well as other notable clarifying guidance included in the FASB's final standard. It also highlights key differences that will remain between U.S. GAAP and IFRS.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Testing Goodwill for Impairment6/6/11 | Assurance services
PwC expresses its support, in principle, of the use of some form of a qualitative assessment that could result in an entity not having to measure fair value of a reporting unit in certain circumstances. PwC believes the proposed update will be more cost effective than current guidance when a reporting unit's fair value substantially exceeded its carrying amount in a prior period and no significant adverse changes have since occurred. PwC believes, however, that in other situations, the proposed update may limit potential cost savings and create implementation challenges. Consequently, the Firm believes a modification to the existing guidance that expands the ability to carry forward the fair value determination of a reporting unit could...
Dataline
Dataline: Hedge accounting -- Applying the shortcut method to "late" hedges (No. 2011-22)6/2/11 | Assurance services
This Dataline discusses certain considerations in the application of the shortcut method of hedge accounting to a late hedge.
Corporate Governance Series
Frequently asked questions - A followup to PwC's XBRL webcast5/19/11 | Assurance services
On May 11, 2011 PwC gave a public webcast, How to make the best out of the XBRL situation. During that webcast, over 100 questions were posted to the group. We provide here a response to those questions we felt had broad and general value.
Tax accounting insights
Seven principles to consider when preparing a tax provision for subsidiary or carve-out financial statements5/16/11 | Tax accounting services
Income tax provision preparation for stand-alone subsidiary or carve-out financial statements is a challenging and complex area of practice. In completing these calculations, we believe it is important to have a consistent, thoughtful framework for addressing the many judgments involved in the process. To assist you with the preparation of separate company financial statements, PwC's Tax accounting insights presents "Seven principles to consider when preparing a tax provision for subsidiary or carve-out financial statements" publication.
Point of view
Point of view: Finding the right pace for standard setting: Priority project timelines extended — quality cited5/12/11 | Assurance services
Issuing high quality accounting standards is paramount. The boards should take whatever time is needed to accomplish this goal.
Dataline
Dataline: Leasing -- Redeliberations of the leasing project -- Some new twists (No. 2011-21)5/6/11 | Assurance services
This Dataline discusses the redeliberation decisions reached on the FASB and IASB's joint leasing project during the board meetings in January 2011 through April 2011. We also include PwC observations on the potential implications as well as examples on the application of the boards' tentative decisions.
Dataline
Dataline: Goodwill impairment - FASB proposes changes to impairment test (No. 2011-20)5/5/11 | Assurance services
On April 22, 2011, the FASB issued an exposure draft of a proposed ASU that would change the goodwill impairment test. The proposal would allow an entity first to assess "qualitatively" whether it is necessary to perform the current two-step goodwill impairment test under US GAAP. Further testing would be required only if an entity determines it is more-likely-than-not that a reporting unit's fair value is less than its carrying amount. Comments on the proposal are due on June 6, 2011. This Dataline takes a closer look at the proposal and includes our observations on certain key areas.
PwC comment letter (FASB)
PwC Comments on Invitation to Comment: Selected Issues about Hedge Accounting (Including IASB Exposure Draft, Hedge Accounting)4/26/11 | Assurance services
In view of the difficulties that practice has experienced in applying hedge accounting, PwC supports the FASB and IASB's overall efforts to simplify accounting for hedging activities and to improve transparency for users of financial statements. The firm is supportive of many of the proposed amendments to hedge accounting in the FASB's proposed ASU, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities, issued in May 2010. PwC expects that several of the FASB's proposed amendments will help reduce the complexity of qualifying for hedge accounting and improve the consistency and comparability of financial reporting.
Dataline
Dataline: Revenue from contracts with customers -- Key decisions propel the project forward (No. 2011-19)4/21/11 | Assurance services
The FASB and IASB began redeliberations on their proposed revenue standard in January 2011 and have continued those redeliberations through April. The boards have focused their discussions on common themes in the comment letters, and have reached several tentative decisions. Some decisions confirm conclusions in the exposure draft and others significantly change direction from what was proposed previously. This Dataline summarizes key aspects of the proposed standard, certain themes identified in the comment letters, and tentative decisions made during recent board meetings.
Dataline
Dataline: Troubled Debt Restructurings -- FASB issues clarifying guidance for creditors' evaluations of whether a restructuring is a troubled debt restructuring (No. 2011-18)4/20/11 | Assurance services
On April 4, 2011 the FASB issued Accounting Standard Update No. 2011-02, Receivables (Topic 310): A CreditorÆs Determination of Whether a Restructuring Is a Troubled Debt Restructuring (the ASU). The ASU provides additional guidance to creditors for evaluating whether a modification or restructuring of a receivable constitutes a troubled debt restructuring. This PwC Dataline discusses the key provisions of the new guidance and offers our observations. ...
- How companies are preparing for US GAAP and IFRS convergence: 2011 survey: PwC
4/19/11 | US GAAP & IFRS Convergence
PwC surveyed 1,400 executives to get their views about convergence, its likely impact, and how they are preparing for changes to come. This report gives you key insights so you can see how your company's progress on convergence compares to others in the marketplace.
Practical tip
Practical tip: Companies may need to include separate equity method investee financial information in their interim financial statements (No. 2011-02)4/12/11 | Assurance services
Rule 10-01(b)(1) of Regulation S-X requires companies to include separate summarized income statement information in their interim financial statements for each equity investee if (i) separate financial statements of the investee would be required for annual periods and (ii) the investee would be required to file Part I of Form 10-Q if the investee were a registrant.
PwC comment letter (FASB)
PwC Comments on IASB/FASB Supplementary Document: Accounting for Financial Instruments: Impairment4/4/11 | Global accounting consulting services
Consistent with the Firm's comment letters on the original IASB exposure draft and the FASB proposed ASU, PwC supports an expected loss approach to accounting for the impairment of financial assets carried at amortized cost. PwC believes the impairment model should: (i) measure credit losses consistent with current market expectations regarding collectability, and (ii) recognize the expected losses over the life of the instrument in a manner consistent with its pricing. The Firm believes this better reflects the economics of lending transactions than recognizing lifetime expected losses immediately. While preferring the conceptual merits of such a model, PwC acknowledges the operational and pragmatic concerns that exist and are...
Dataline
Dataline: Accounting and disclosure implications of the earthquake in Japan and related events (No. 2011-17)3/28/11 | Assurance services
On March 11, 2011, an earthquake struck off the northeast coast of Japan, triggering a tsunami. The power supply in certain parts of Japan has been cut-off with rolling blackouts scheduled in other areas. Further compounding the situation, nuclear power plants were damaged causing worries about the possible meltdown of nuclear reactors and the release of harmful radioactive materials. While not all-inclusive of the types of issues that may be created by these events, this Dataline discusses several accounting and disclosure-related matters companies may encounter in dealing with the financial reporting implications of these tragic events.
- US GAAP convergence and IFRS: What you need to know about the FASB and IASB’s joint projects
3/18/11 | US GAAP & IFRS Convergence
PwC offers a complete resource of information related to the joint convergence projects as you manage the potential impact of the proposed standards on your company.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Hedge Accounting3/15/11 | Global accounting consulting services
PwC believes that overall the proposals in the exposure draft make significant progress towards aligning the accounting more closely with risk management, establishing a more principles-based approach and addressing many of the inconsistencies and weaknesses in IAS 39. PwC is particularly supportive of eliminating the current bright line for effectiveness testing, allowing effectiveness to be assessed on a qualitative basis, expanding the ability to hedge component risks to non-financial items, and allowing hedge accounting to be applied to groups of items that include offsetting positions. PwC believes, however, that there are some areas where changes to the proposed standard should be considered to better address the project's objective.
- Similarities & Differences: A comparison of US GAAP and IFRS for investment companies
3/8/11 | Asset management
Now in it's third edition, this publication provides a general overview of the key similarities and differences between the accounting principles generally accepted in the United States (US GAAP) and International Financial Reporting Standards (IFRS) as they are applicable specifically to investment companies.
PwC comment letter (IASB)
PwC Comments on IFRS Foundation Trustees' Review of Strategy3/3/11 | Global accounting consulting services
PwC global network notes the potential for overlap between the Trustees' strategy review and the Monitoring Board's review of governance, while applauding recent announcements around enhanced coordination of the two reviews. Overall, the PwC network continues to support the existing three-tier structure (Trustees, Monitoring Board, and the IASB), but suggests greater clarity in the roles and responsibilities of the Monitoring Board and the Trustees. The PwC network also emphasizes that the organizationÆs structure needs to be scalable to meet the growing need for interpretation and application guidance with the continued adoption of IFRS throughout the world and the high volume of new standards expected in the next year.
Dataline
Dataline: Revenue from contracts with customers -- The constituents have been heard... (No. 2011-16)3/1/11 | Assurance services
The FASB and IASB received over 960 comment letters in response to their June 24, 2010 exposure draft, Revenue from Contracts with Customers. A number of recurring themes were noted in the comment letters, even across industries. Areas of focus included transfer of control, identification of performance obligations, determining the transaction price, transition, segmentation, accounting for warranties, licenses of intellectual property, and disclosures. At their January and February 2011 meetings, the boards began redeliberating their proposals, focusing on the common themes in the comment letters, and reached a number of tentative decisions. This Dataline summarizes key aspects of the proposed standard, certain themes identified in the...
Dataline
Dataline: Pension/OPEB accounting -- Understanding changes expected from the IASB (No. 2011-15)2/28/11 | Assurance services
The IASB is nearing completion of various amendments to its standard on accounting for defined benefit pensions and other postretirement benefits (OPEB). The IASB has concluded that fluctuations in the value of the benefit obligations and plan assets (i.e., gains and losses) should be recognized in the balance sheet in full, with a charge or credit to other comprehensive income (OCI) in the periods in which the gain or loss occurs. We expect the final amendments to be issued in April 2011, with an effective date no earlier than January 1, 2013. This Dataline looks at the decisions made by the IASB to date and offers our insight on the upcoming changes in this area of IFRS. Since the FASB and IASB's longer-term objective is to converge...
Dataline
Dataline: Insurance contracts -- Comment letter themes being addressed in fast paced redeliberations (revised March 4, 2011*) (No. 2011-14)2/25/11 | Assurance services
Several key issues surfaced from the comment letters, three public roundtable discussions, and other outreach efforts regarding the IASB's July 2010 exposure draft (ED) and the FASB's related September 2010 discussion paper (DP) setting out proposed changes to insurance accounting. Respondents' preferences on the overall measurement model were mixed with US constituents tending to support the FASB approach (in the event of a converged standard), and a clear majority of non-US constituents supporting the IASB approach. This Dataline provides a brief summary of the FASB DP and IASB ED along with a detailed analysis of the comments received on both the DP and ED for major issues, as well as the steps the boards have taken through February...
Dataline
Dataline: Fair value measurement -- FASB and IASB joint project near completion (No. 2011-12)2/24/11 | Assurance services
On June 29, 2010, both the FASB and IASB issued exposure drafts of proposed changes to their standards aimed at bringing together as closely as possible the fair value measurement and disclosure guidance of the two boards. The boards have been considering the feedback they received on the exposure drafts, and except for effective dates and transition, the boards have completed their redeliberations and plan to finalize their new standards in March 2011. Although many of the changes to existing U.S. GAAP will not have a significant effect on practice, some will. This Dataline summarizes key aspects of the FASB's exposure draft and decisions reached by the boards during redeliberations conducted subsequent to the issuance of their...
Dataline
Dataline: FASB redeliberates its financial instruments proposal -- An update on significant changes as of February 24, 2011 (No. 2011-13)2/24/11 | Assurance services
The accounting for financial instruments is a priority convergence project for the FASB and IASB. The boards are aiming to finalize most of their respective guidance in 2011. The FASB received a significant amount of input from financial statement users, preparers, and accounting firms on its May 2010 proposal. The tentative decisions the FASB has made in its redeliberations point to significant changes from the proposal. This Dataline provides an update on the FASB's redeliberations, with a focus on the significant changes the FASB has tentatively decided to make thus far to its May 2010 proposal.
Dataline
Dataline: Leasing -- FASB and IASB agree on changes that will reduce complexity of the proposed leasing standard (No. 2011-11)2/23/11 | Assurance services
The comment period on the FASB and IASB's proposed accounting standard on leases ended on December 15, 2010 and the boards have begun redeliberating the exposure draft. Thus far, the boards have made tentative decisions to change the proposals in the exposure draft with respect to the definition of lease term (threshold for inclusion of extension options) and inclusion of variable or uncertain cash flows (i.e., contingent rent). The boards are also considering changes in the definition of a lease, profit and loss recognition patterns, and the lessor accounting model. This Dataline provides a summary of the overall status of the boards' redeliberations on lease accounting.
Dataline
Dataline: Balance sheet offsetting -- The FASB and IASB proposal (No. 2011-10)2/22/11 | Assurance services
On January 28, 2011, the FASB and the IASB jointly issued an exposure draft, Offsetting Financial Assets and Financial Liabilities. Entities that historically elected to present derivatives assets and liabilities subject to master netting arrangements on a net basis will be required to report them gross in their statement of financial position. This could significantly impact the balance sheet of many reporting entities that currently apply an accounting policy election to net these amounts. The exposure draft also proposes new disclosure requirements for financial assets and liabilities subject to offset. This Dataline looks at the key aspects of the exposure draft, which is open for public comment through April 28, 2011.
Dataline
Dataline: Impairment redux -- FASB and IASB are seeking comments on a converged impairment model for financial assets (No. 2011-09)2/21/11 | Assurance services
On January 31, 2011, the FASB and IASB published a supplementary document to solicit views on a converged model to account for impairments of certain financial assets managed in an open portfolio. Public comments on the supplement are due by April 1, 2011. The boards plan to jointly redeliberate the proposals in the supplement based on the feedback received on it. The IASB expects to issue a final impairment standard by June 2011, and the FASB expects to issue a final Accounting Standards Update that includes the credit impairment model in 2011. This PwC Dataline highlights the key proposals in the supplement.
- Are you ready for the proposed changes to revenue recognition?
2/17/11 | Assurance services
PwC's article summarizes the key provisions of the "Revenue recognition" exposure draft, including specifics for the most-impacted industries and impacts to existing IT infrastructure.
Dataline
Dataline: Statement of comprehensive income -- The FASB is expected to allow one continuous statement, or separate consecutive statements of net income and other comprehensive income (No. 2011-08)2/15/11 | Assurance services
The FASB and IASB issued proposals in May 2010 to require companies to issue a single continuous statement of comprehensive income. Together the FASB and IASB received over 200 comment letters on the proposed new primary financial statement. Based on their re-deliberations, the Boards are expected to amend their proposals. Both Boards are expected to issue final standards incorporating the tentative conclusions by the end of the first quarter of 2011. This Dataline reflects the decisions that we anticipate will be formalized in a soon to be issued FASB Accounting Standards Update.
Dataline
Dataline: XBRL -- Looking back at 2010 and forward to 2011 (No. 2011-07)2/3/11 | Assurance services
A final version of the 2011 U.S. GAAP Financial Reporting Taxonomy is expected to be published for official use in 2011 after the FASB has completed its update and the SEC acknowledges it as a supported taxonomy for use by filers. Also, the SEC continues to release observations and interpretations based on its evaluation of submissions from the first two phase-in groups. Preparers should take advantage of lessons learned to date as they plan to meet the upcoming requirements. This Dataline describes recent guidance provided by the SEC staff and highlights other helpful information and reminders for preparers.
Dataline
Dataline: Accounting for hedging activities -- A comparison of the FASB's and IASB's proposed models (No. 2011-06)2/1/11 | Assurance services
In December 2010, the IASB released for public comment an exposure draft of proposed changes to the accounting for hedging activities under IFRS, resulting from the third phase of the IASB's project to revise financial instruments accounting. In May 2010, the FASB issued an exposure draft that proposed fundamental changes to the accounting for financial instruments under U.S. GAAP, including certain changes to hedge accounting. The two boards have taken different directions with their proposals. The FASB is planning to seek feedback from its constituents on the IASB's December 2010 exposure draft. This Dataline compares the FASB's May 2010 exposure draft and the IASB's December 2010 exposure draft.
PwC comment letter (FASB)
PwC Comments on Request for Views/Discussion Paper: Effective Dates and Transition Methods1/31/11 | Global accounting consulting services
PwC believes a single effective date approach should be adopted with an unrestricted early adoption option of any or all of the standards available to all companies. This is especially important for first-time adopters of IFRS. Based on the firm's discussions with clients that are most affected and assuming final standards on the priority projects are issued by June 2011, PwC believes the effective date should be no earlier than periods beginning 1 January 2015. This date would allow companies sufficient lead time to implement the new standards correctly the first time, reduce costs, improve operations and minimize risk.
Dataline
Dataline: Leasing -- The responses are in... (No. 2011-05)1/27/11 | Assurance services
The FASB and IASB received over 770 comment letters in response to their August 17, 2010 Exposure Draft, Leases. The comment period closed on December 15, 2010. The boards have also performed direct outreach with users and preparers, and held public roundtable discussions in London, Hong Kong, Chicago and Norwalk. This Dataline summarizes the key themes from the comment letters.
Dataline
Dataline: Accounting implications of the elimination of the preferential exchange rate in Venezuela (No. 2011-04)1/21/11 | Assurance services
On December 30, 2010, the government of Venezuela announced that it is eliminating the 2.6 BsF/$ preferential exchange rate. On January 14, 2011, the government of Venezuela published a clarification specifying how the announcement on December 30, 2010 will be administered. The elimination of the preferential exchange rate could affect the rate used for re-measurement of bolivar-denominated transactions, and could affect the accounting for certain bonds issued by the Venezuelan government. This Dataline discusses the accounting implications.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Reconsideration of Effective Control for Repurchase Agreements (Transfers and Servicing - Topic 860)1/18/11 | Assurance services
PwC supports the Board's proposal to modify the criteria for when repurchase agreements, including reverse repurchase agreements (collectively referred as "repurchase agreements) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity, would be accounted for as a sale (or secured borrowing) upon transfer of such assets. In the letter, the firm provides responses to the Board's specific questions.
Dataline
Dataline: Pension and OPEB accounting -- Exploring changes in accounting policies (No. 2011-03)1/13/11 | Assurance services
Many funded retirement benefit plans have experienced significant losses on the investments held by the plan. At the same time, historic low discount rates have resulted in substantial increases in benefit obligations. These events have resulted in sizable losses that can be deferred in accumulated other comprehensive income (AOCI), but are then required to be amortized into income over future periods. Some employers may be considering changing their accounting policies for recognizing gains and losses that arise in their retirement benefit plans to reduce or eliminate the impact on future periods' reported net income of recognizing previously deferred losses. This Dataline explores the implications and considerations associated with an...
PwC comment letter (IASB)
PwC Comments on Tentative agenda decision: IAS 37 Provisions, Contingent Liabilities and Contingent Assets - Inclusion of own credit risk in the discount rate1/11/11 | Global accounting consulting services
PwC does not agree with the decision to defer consideration of this issue until the IASB's project to replace the provisions standard (IAS 37), or with the reasons given for that decision. PwC is aware of some differences of view on this issue, and believes there may be limited diversity in practice today, but the Firm is concerned that the agenda decision might result in further diversity that does not exist today.
Dataline
Dataline: New revenue recognition guidance -- A more economic approach to accounting for arrangements with multiple deliverables (revised May 12, 2011*) (No. 2011-02)1/11/11 | Assurance services
In October 2009, the FASB issued new guidance for arrangements with multiple deliverables under which a company is required to use its best estimate of selling price for the deliverables in an arrangement when vendor specific objective evidence or third party evidence of the selling price is not available. In Dataline 2009-54, we provided our analysis and insights on the new guidance. In this new Dataline, we've updated and expanded on the discussion in Dataline 2009-54 to incorporate additional insight and implementation considerations based on our experience with companies that have early adopted the new guidance.
Tax accounting insights
IFRS, the current landscape for US tax executives1/9/11 | Tax accounting services
The potential transition to IFRS in the United States has been an ongoing focus of the SEC over the past several years. As part of their current workplan, the SEC is analyzing the impact of IFRS on US issuers and whether, when, and how to incorporate IFRS into the US financial reporting system. In this Tax accounting insights, we inform US tax executives on the current landscape of IFRS, including the key tax considerations that may arise in the near-term
Dataline
Dataline (Supplement): A New Approach to Lease Accounting - Real estate lessee supplement (No. 2010-38)1/6/11 | Assurance services
The FASB and IASB's recently-issued exposure draft titled Leases contains the boards' proposal for a new approach to lease accounting that could fundamentally change the way both lessees and lessors account for leases. Under the proposed model, a lessee's rights and obligations under all leases - existing and new - would be recognized on its balance sheet. Lessors would report leases using either a performance-obligation approach or a derecognition approach. Dataline 2010-38 provides an overview and various insights into the boards' proposed standard. In January 2011, PwC issued a real estate lessee supplement to this Dataline summarizing the exposure draft from a lessee's perspective.
Practical tip
Practical tip: In evaluating the significance of an equity method investee, the SEC's new interpretive guidance must be considered for all periods presented (No. 2011-01)1/6/11 | Assurance services
Registrants must evaluate the signficance of their equity-method investees to determine whether footnote disclosure under Rule 4-08(g) of Regulation S-X or separate financial statements under Rule 3-09 of Regulation S-X is required for any such investee in the registrant's annual report on Form 10-K. In December 2010, the SEC issued new interpretive guidance for measuring the significance of equity method investees. This new interpretive guidance should be used in measuring the significance of an equity-method investee for all periods presented.
Dataline
Dataline: Accounting for costs associated with acquiring or renewing insurance contracts -- Questions and interpretive responses on implementing ASU 2010-26 (No. 2011-01)1/5/11 | Assurance services
In October 2010, the FASB released ASU 2010-26, Financial Services--Insurance (Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. The ASU represents a final consensus of the Emerging Issues Task Force on Issue 09-G. ASU 2010-26 will likely change how insurance companies account for acquisition costs, particularly in determining what costs are deferrable. The new requirements are effective for fiscal years beginning after December 15, 2011, either prospectively or by retrospective adjustment. Earlier application is permitted as of the beginning of a company's annual reporting period (e.g., in 2011 for calendar year companies). This Dataline highlights certain frequently asked questions about the...
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-2012/23/10 | Assurance services
PwC supports the FASB's proposal to delay the effective date of the additional disclosures about troubled debt restructurings in ASU 2010-20 until it completes deliberations in its separate project to clarify what constitutes a troubled debt restructuring. The firm believes that disclosures about restructurings designed to mitigate or avoid credit losses are important to users of the financial statements. PwC, however, shares the concerns raised by the Board's constituents that implementing the new troubled debt restructuring (TDR) disclosure requirements in ASU 2010-20 in one reporting period, shortly followed by the adoption of a change in the guidance on what constitutes a TDR, would unnecessarily burden preparers and could confuse...
Dataline
Dataline: Revenue from contracts with customers -- The responses are in... (No. 2010-45)12/20/10 | Assurance services
The FASB and IASB received over 960 comment letters in response to their June 24, 2010 exposure draft, Revenue from Contracts with Customers. The comment period closed on October 22, 2010. A number of recurring themes were noted in the comment letters, even across industries. Areas of focus included transfer of control, identification of performance obligations, determining the transaction price, transition, segmentation, accounting for warranties, licenses of intellectual property, and disclosure requirements. The boards expect to issue the final standard in 2011, with a likely effective date no earlier than 2014. This Dataline summarizes key aspects of the proposed standard as well as the themes in comment letters received by the boards.
Practical tip
Practical tip: Discontinued operations reporting for a disposal group should continue to be evaluated until the issuance of the financial statements (No. 2010-11)12/20/10 | Assurance services
Dividends paid on underlying shares related to incentive awards while the award is outstanding or the restricted stock award is unvested may need to be recorded as compensation expense. The accounting depends on whether the award is classified as an equity or liability award and, if classified as an equity award, whether the award is expected to vest. In this Practical Tip, PwC highlights the appropriate accounting treatment.
Dataline
Dataline: Highlights of the 2010 AICPA National Conference on Current SEC and PCAOB Developments (No. 2010-44)12/16/10 | Assurance services
Last week's annual AICPA National Conference on Current SEC and PCAOB Developments focused on restoring public trust and investor confidence in the U.S. capital markets. Presenters called for all members of the financial reporting supply chain, including boards, management and auditors, to play a role in these efforts. This Dataline takes a closer look at the topics discussed at the conference.
M&A snapshot
Noncontrolling interests -- why minority shareholder rights matter (M&A snapshot)12/16/10 | Assurance services
The M&A Standards changed how a parent reports the minority shareholder interests in a partially owned subsidiary in its consolidated financial statements. The minority shareholder interests, or noncontrolling interests (''NCI''), are generally presented within equity as if the parent and the minority shareholders have similar economic interests. Previously, NCI were generally presented between liabilities and equity (''mezzanine equity''). This edition focuses on the classification of redeemable NCI and how different minority shareholder rights may lead to different financial reporting by the parent.
- Pension accounting: New solution for an old dilemma?
12/15/10 | Financial Executives International
The IASB's proposed changes to pension accounting would introduce fundamental changes to the financial reporting for these arrangements. In the November issue of Financial Executives Magazine, PwC partners Murray Akresh and Ken Stoler authored an article exploring these implications, and discussing a recent PwC study examining the potential impact of the proposals.
PwC comment letter (FASB)
PwC Comments on Proposed ASU, Clarifications to Accounting for Troubled Debt Restructurings by Creditors12/14/10 | Assurance services
PwC recommends that the troubled debt restructuring recognition and measurement model also be considered in the Board's deliberations on the financial instruments project. The firm believes it is important to consider the financial instruments accounting model, including the recognition and measurement for troubled debt restructurings, holistically in order to achieve a consistent framework. PwC also recommends that the Board modify the troubled debt restructuring measurement guidance such that the relevant impairment model is independent from the identification of a troubled debt restructuring.
Dataline
Dataline: 2010 year-end accounting and reporting considerations (No. 2010-43)12/13/10 | Assurance services
This year end, companies continue to face many complex financial reporting issues such as asset impairments, debt modifications, revenue recognition and pensions. Recently issued legislation has created additional reporting considerations. Also, the SEC has put additional emphasis on compliance with certain existing disclosure requirements such as disclosures of loss contingencies, goodwill impairment, segments, and liquidity. Recently issued guidance by the FASB has become effective in 2010, including new guidance on consolidations, updates to fair value disclosures, and disclosures about the credit quality of finance receivables. While not intended to serve as an all-inclusive checklist, this Dataline should be helpful as a timely...
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Leases12/2/10 | Assurance services
PwC expressed support for the boards' objective to report relevant and representationally faithful information to users of financial statements about the amounts, timing and uncertainty of cash flows arising from leases. The firm acknowledges that the proposals address the primary concern - that is, the recognition of assets and liabilities arising out of lease contracts - however, application of the proposals might reduce the income statement usefulness to many users. The firm believes that the proposals will result in significant cost and complexity for some preparers. The firm does not believe that the current proposals fully meet the objective in a number of key areas including the measurement of more complex leases, specifically...
PwC comment letter (IASB)
PwC Comments on Consultation Document: The annual improvements process: Proposals to amend the Due Process Handbook for the IASB12/2/10 | Global accounting consulting services
PwC supports the proposal to amend the Due Process Handbook to include criteria for assessing whether an issue should be dealt with through the annual improvements project. PwC agrees that it is helpful to have criteria for distinguishing between potential improvements and more significant projects. In the letter, PwC provides some comments drafting suggestions.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Leases12/2/10 | Global accounting consulting services
PwC expressed support for the boards' objective to report relevant and representationally faithful information to users of financial statements about the amounts, timing and uncertainty of cash flows arising from leases. The firm acknowledges that the proposals address the primary concern - that is, the recognition of assets and liabilities arising out of lease contracts - however, application of the proposals might reduce the income statement usefulness to many users. The firm believes that the proposals will result in significant cost and complexity for some preparers. The firm does not believe that the current proposals fully meet the objective in a number of key areas including the measurement of more complex leases, specifically...
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Severe Hyperinflation: Proposed Amendment to IFRS 112/2/10 | Global accounting consulting services
PwC believes that an amendment to address severe hyperinflation should be made to IAS 29 rather than IFRS 1 because the entities that requested the board consider this issue are unable to prepare financial statements in accordance with IFRSs, as they cannot apply the measurement requirements of IAS 29. PwC is concerned that an amendment to IFRS 1 could be applied more widely than the board intends.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Insurance Contracts12/1/10 | Global accounting consulting services
PwC believes the IASB should continue to work with the FASB in evaluating and making changes responsive to comments received, resolving current differences between the Boards, and developing a global insurance standard. PwC expresses concerns about certain aspects of both the IASB and FASB proposals. One key concern is how the proposals would interact with other standards that are relevant to insurers' financial statements. PwC believes the IASB and FASB need to resolve their remaining differences on this project, address the concerns regarding the proposed models raised in PwC's letter to the IASB, and finalize one converged financial instruments standard, in order for a proposed insurance contracts accounting standard to be...
PwC comment letter (FASB)
PwC Comments on FASB Discussion Paper: Preliminary Views on Insurance Contracts11/30/10 | Assurance services
PwC believes the FASB should continue to work with the IASB in evaluating and making changes responsive to comments received, resolving current differences between the Boards, and developing a global insurance standard. PwC expresses concerns about certain aspects of both the IASB and FASB proposals. One key concern is how the proposals would interact with other standards that are relevant to insurers' financial statements. PwC believes the FASB and IASB need to resolve their remaining differences on this project, address the concerns regarding the proposed models raised in PwC's letter to the IASB, and finalize one converged financial instruments standard, in order for a proposed insurance contracts accounting standard to be...
PwC comment letter (IFAC)
PwC Comments on Proposed Revised ISA 610, Using the Work of Internal Auditors, and Related Enhancements to ISA 315 (Revised)11/30/10 | Assurance services
PwC believes that the proposed revisions will prove beneficial to external auditors in: (1) explaining how the internal audit function can inform the external auditor's understanding of the entity and risk assessment; and (2) determining if, and when, it is appropriate for the external auditor to use the work of internal audit.
- Are you ready for the proposed changes to accounting for leases?
11/22/10 | Assurance services
Given the potential impact that proposed changes to leasing will have on accounting, operations and IT systems, companies should begin assessing the implications of the proposal on existing contracts, technology and processes.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Deferred Tax: Recovery of Underlying Assets (Proposed amendments to IAS 12)11/15/10 | Global accounting consulting services
PwC does not support the specific proposals in the exposure draft. PwC has suggested an alternative approach that addresses concerns with the current model in a way that reflects the economic consequences of recovering an asset measured at fair value but also minimizes the risk of unintended consequences.
Accounting guides
Guide to Accounting for Bankruptcies and Liquidations - 2010 edition11/11/10 | Assurance services
PwC is pleased to offer this comprehensive guide to accounting for bankruptcies and liquidations. While the guidance for bankruptcy accounting has not been updated for a number of years and is unique, its relevance has increased given the recent downturn in the economy and the number of bankruptcy filings. This guide explains the fundamental principles of bankruptcy and liquidation-basis accounting, as well as considerations prior to entering bankruptcy, for companies that prepare financial statements under U.S. GAAP, and provides our perspectives on the application of those principles.
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Disclosure about an Employer's Participation in a Multiemployer Plan11/8/10 | Assurance services
PwC believes the proposed ASU would improve the transparency of disclosure and provide incremental information useful to assess the risks of an employer's participation in a multiemployer plan. PwC believes, however, that there are practical implementation issues that employers and plans will face in complying with the proposed requirements, which the firm recommends that the Board consider.
PwC comment letter (IASB)
PwC Comments on Tentative Agenda Decisions re: IAS 36 Impairment of Assets11/8/10 | Global accounting consulting services
Regarding IAS 36 calculation of value in use, PwC agrees with the decision of the IFRS IC not to take this item onto its agenda. PwC, however, encourages the IFRS IC to clarify the reasons for its conclusion so that the published rejection notice does not have unintended consequences. Regarding IAS 36 accounting for impairment testing of goodwill when non controlling interests (NCI) are recognized, PwC disagrees with the decision of the IFRS IC not to recommend this item for inclusion in Annual Improvements. PwC believes that the issue can and should be dealt with as part of the Annual Improvement projects to allow for resolution in a more timely manner than waiting for the outcome of an IFRS 3 post-implementation review. The firm...
PwC comment letter (FASB)
PwC Comments on Proposed FASB Roundtable Meeting Agenda re: IASB Staff Draft, IFRS X - Consolidated Financial Statements11/4/10 | Assurance services
PwC continues to believe that the consolidation guidance should not be reconsidered separately from a reconsideration of the derecognition guidance. PwC believes that even if the FASB adopts a consolidation model that is more consistent with the model described in the Staff Draft, convergence, and therefore consistency and comparability, will not be achieved, particularly for securitization entities, unless a converged derecognition model is also adopted. Accordingly, PwC believes that the FASB should reconsider the consolidation guidance together with the derecognition guidance.
Dataline
Dataline: Highlights of November 2010 meeting of FASB's Valuation Resource Group (No. 2010-42)11/4/10 | Assurance services
At its November 2010 meeting, the FASB's Valuation Resource Group (VRG) discussed issues relating to: (1) fair value measurement of contingent consideration in a business combination, (2) application of the multi-period excess earnings method and the Greenfield method to value intangible assets, (3) consideration of premiums and discounts in fair value measurements, (4) a proposed Accounting Standards Update on determining the carrying amount of a reporting unit when performing step 1 of the goodwill impairment test, and (5) measurement uncertainty analysis disclosure. This Dataline summarizes the key points discussed by the FASB and VRG and shares the firm's insights.
Dataline
Dataline: Multiemployer benefit plans -- Recent accounting & reporting developments (No. 2010-41)11/2/10 | Assurance services
The recent economic crisis has resulted in increased levels of underfunding for many multiemployer pension and other postretirement benefit plans. Financial statement users have raised concerns about the current disclosure requirements and the lack of information they provide about the commitments and risks involved with an employer's participation in a multiemployer plan. In response, both the FASB and IASB recently issued separate exposure drafts that propose significant additional disclosure requirements for participating employers. This Dataline describes the accounting considerations for employers who participate in a defined benefit multiemployer plan, as well as the additional disclosure requirements proposed by the FASB and IASB.
- Business combinations and noncontrolling interests - Financial statement disclosure summary
11/1/10 | Assurance services
This new PwC publication provides data, analysis and insights on how certain of the financial statement disclosures required by U.S. GAAP related to business combinations and noncontrolling interests were applied in practice during the initial year of adoption of the FASB's M&A standards. Also included are disclosures from public filings related to business combinations and noncontrolling interests. The publication complements the 2010 edition of PwC's A Global Guide to Accounting for Business Combinations and Noncontrolling Interests; however, the disclosure summary only covers U.S. GAAP financial statements.
- IFRS and US GAAP - Similarities and differences related to accounting for compensation and benefit arrangements
10/28/10 | Human resource services
IFRS and US GAAP continue to move towards convergence. The SEC expects to make a determination in 2011 regarding incorporating IFRS into the financial reporting system for US domestic issuers. This HRS insight highlights the similarities and differences between IFRS and US GAAP related to accounting for compensation and benefit arrangements.
Dataline
Dataline: FASB proposes guidance to assist creditors in identifying trouble debt restructurings (No. 2010-40)10/26/10 | Assurance services
The Financial Accounting Standard Board recently exposed for comment a proposed Accounting Standard Update that would provide additional guidance to assist lenders in determining whether a restructuring of a receivable constitutes a troubled debt restructuring (TDR). This Dataline discusses the key provisions and scope of the proposed ASU and shares PwC's insight on it.
PwC comment letter (FASB)
PwC Comments on Exposure Draft: Revenue from Contracts with Customers10/25/10 | Global accounting consulting services
PwC agrees with the theoretical merit of many of the concepts included in the proposed standard. PwC believes, however, that there are a number of situations where the concepts may be difficult to apply, do not appear cost beneficial, or both. PwC also agrees with the boards that full retrospective application of the proposed standard might benefit users, but a more pragmatic approach to transition might likely be needed in many situations. The firm encourages the boards to allow for early adoption of the proposed standard.
PwC comment letter (IASB)
PwC Comments on Exposure Draft: Removal of fixed dates for first-time adopters (proposed amendments to IFRS 1)10/19/10 | Global accounting consulting services
PwC agrees with the proposed amendments in the exposure draft and believes that the removal of the references to fixed dates in the standard is consistent with the principles of IFRS 1.
Practical tip
Practical tip: Computational guidance when a valuation allowance is required under ASC 740 and there are deferred tax liabilities related to indefinite-lived assets (No. 2010-10)10/7/10 | Assurance services
Accounting Standards Codification, Topic 740, Income Taxes (ASC 740), requires companies to record a valuation allowance for deferred tax assets (DTA) that, based on all available evidence, are not expected to be realized based on ACS 740's more-likely-than-not test. When determining the appropriate valuation allowance, companies should be mindful of what is commonly referred to as the "naked credit" -- a situation in which deferred tax liabilities related to indefinite-lived assets cannot be used as a source of taxable income to support the realization of deferred tax assets. This PwC Practical tip describes the "naked credit" effect and provides examples to assist you.
M&A snapshot
Carve-out Financial Statements--A challenging process (M&A snapshot)9/30/10 | Assurance services
In many M&A transactions, companies looking to dispose of non-core businesses or to generate cash may sell only a portion of their operations (e.g., a subsidiary or a business unit). As part of these transactions, a seller may need, or want, to prepare separate financial statements of the operations being sold, commonly referred to as carve-out financial statements. The preparation of these financial statements can be challenging as there is limited guidance covering their composition. This volume of Mergers & Acquisitions - A snapshot, focuses on some of the issues companies may face when preparing carve-out financial statements, how those statements may differ from their own financial statements, and how the M&A Standards may impact...
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Statement of Comprehensive Income9/27/10 | Assurance services
PwC recommends that the FASB and IASB develop a set of consistent principles to govern the use of other comprehensive income. PwC encourages the Boards to add to their post-2011 agendas a project to address the reporting of financial performance, the purpose and use of other comprehensive income, and the extent to which recycling is appropriate. Many companies and financial statement users continue to believe that a measure of net income is important. PwC, therefore, supports the requirement to present this sub-total within a single statement of comprehensive income and the Firm believes strongly that this line item should be retained as the Boards develop their thinking on the presentation of financial statements.
Dataline
Dataline: Insurance Contracts -- Fundamental Accounting Changes Proposed (Revised February 16, 2011*) (No. 2010-39)9/24/10 | Assurance services
The FASB has issued a discussion paper seeking comments on its preliminary views on accounting for insurance contracts that would fundamentally change the accounting by insurers and other entities that issue contracts with insurance risk. The discussion paper is an outgrowth of the IASB and FASB's joint efforts to develop a single converged insurance standard. The FASB's release of the discussion paper follows the IASB's late-July issuance of an exposure draft containing its proposals on the same topic. This Dataline discusses both documents and offers the firm's insights on the proposals.
- Fair Value Reporting for Investment Properties under US GAAP
9/23/10 | Assurance services
At its July 14, 2010 meeting, the FASB tentatively decided to issue a proposed Accounting Standard Update to attempt to achieve convergence with International Accounting Standards on accounting for investment properties. However, the FASB concluded that, as opposed to the international accounting standard on investment property, IAS 40, which provides an option to account for investment property at cost or fair value, the proposed standard would require an investment property to be measured at fair value. This new guidance is partially driven by the recently issued Exposure Draft for leasing. Assuming that both standards are adopted, lessors who are in the scope of the investment property guidance would not apply the new leasing...
Dataline
Dataline: A New Approach to Lease Accounting -- Proposed Rules Would Have Far Reaching Implications (No. 2010-38)9/16/10 | Assurance services
The FASB and IASB's recently-issued exposure draft titled Leases contains the boards' proposal for a new approach to lease accounting that could fundamentally change the way both lessees and lessors account for leases. Under the proposed model, a lessee's rights and obligations under all leasesùexisting and newùwould be recognized on its balance sheet. Lessors would report leases using either a performance-obligation approach or a derecognition approach. This Dataline provides an overview and various insights into the boards' proposed standard. The Dataline also includes both lessee and lessor examples of how to apply the proposed standard. ...
PwC comment letter (FASB)
PwC Comments on Proposed ASU: Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS9/9/10 | Assurance services
Although PwC generally agrees with proposals that would enhance consistency between U.S. GAAP and IFRS, the Firm believes the ED should be modified in certain areas described in detail in the letter and recommends that the FASB and the International Accounting Standards Board (IASB) work together to reconcile any substantive differences and work to achieve convergence in fair value measurement and disclosure guidance.
Dataline
Dataline: The GASB's Derivatives Standard -- Recognition and Reporting Guidance for State and Local Government Entities (No. 2010-37)9/9/10 | Assurance services
Entities that apply accounting rules issued by the Governmental Accounting Standards Board (GASB) are implementing a comprehensive new accounting standard on derivative instruments. The standard requires that derivatives be reported at fair value on the balance sheet and that all potential hedges be evaluated for effectiveness. The standard is expected to dramatically affect balance sheets, as most governments historically accounted for derivatives off-balance sheet. The standard impacts financial statements prepared for fiscal years ending June 30, 2010 and thereafter. This Dataline discusses the key provisions of the new standard and offers PwC's observations on implementing it.
Practical tip
Practical tip: Public Companies Should Evaluate Whether the Securities of Any Affiliates Constitute a Substantial Portion of the Collateral for Registered Securities at the End of Each Fiscal Year to Determine Whether Separate Financial Statements of Affiliates Need to Be Filed (No. 2010-09)9/9/10 | Assurance services
Certain filings are required to include separate financial statements for each of a registrant's affiliates (e.g., consolidated subsidiaries) whose securities constitute a substantial portion of the collateral for any class of securities registered or being registered. The "substantial portion" test should be performed in connection with the initial registration of the securities and must be reperformed on an annual basis as long as the securities remain registered and the collateral arrangement is in place. This Practical Tip discusses the requirement and provides an example of the analysis needed.
PwC comment letter (FASB)
PwC Comments on Proposed ASU, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities9/2/10 | Assurance services
As the financial instruments area is fundamental to any convergence efforts, and the cost to the capital markets of divergence would be significant on many levels, PwC urges the FASB and IASB to work collaboratively during the redeliberations phase to resolve remaining substantive differences. PwC supports the FASB's objective of developing a model that increases the decision-usefulness of the information reported about financial instruments. However, PwC believes that the Proposal, taken as a whole, does not contain the most appropriate solutions to achieve that objective.
Dataline
Dataline: Stock-Compensation Arrangements - Accounting for Clawbacks (No. 2010-36)9/2/10 | Assurance services
The Dodd-Frank Wall Street Reform and Consumer Protection Act, was signed into law by President Obama on July 21, 2010. The Act includes a requirement that all U.S. public companies incorporate so-called clawback provisions into incentive compensation arrangements for executive officers. Those clawback provisions will be triggered in the event of certain accounting restatements, and require companies to recover any excess compensation resulting from the misstated financial results during the 3-year period prior to the restatement.Companies have also implemented or are considering other types of clawback features beyond those required in the Act.
Dataline
Dataline: Changes to Financial Instruments Accounting -- Impacts for Nonfinancial Services Companies (No. 2010-34)8/26/10 | Assurance services
The FASB's proposal to change the accounting for financial instruments and hedge accounting could have broad implications to companies across all industries, including those in commercial and industrial industries. The proposed changes could result in a significant expansion of the use of fair value. This Dataline discusses a few of the more common instruments and transactions that could be affected if proposed ASU, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities, is adopted in its current form.
Dataline
Dataline: Financial Statement Presentation -- A Look at the FASB and IASB's Staff Draft (Revised February 3, 2011*) (No. 2010-35)8/26/10 | Assurance services
In July 2010, the FASB and IASB issued a 'Staff Draft' of the Exposure Draft on Financial Statement Presentation to facilitate additional outreach efforts. The staff draft contains significant changes from the discussion paper issued in 2008 and incorporates much of the feedback from comment letters and field tests. This Dataline discusses the key tentative decisions reached by the boards and reflected in the staff draft, together with information the firm has obtained through its observations of board meetings and project updates published by the boards.
Dataline
Dataline: FASB and IASB Propose Changes to Fair Value Measurements and Disclosures (No. 2010-33)8/9/10 | Assurance services
This Dataline describes the key proposed changes in the FASB's exposure draft, Amendments for Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, as well as other notable clarifying guidance. The Dataline also includes PwC's observations about the potential impact of the proposal on practice and commentary about alignment with the IASB's exposure draft titled Measurement Uncertainty Analysis Disclosure for Fair Value Measurements (Limited re-exposure of proposed disclosure).
Dataline
Dataline: Disclosure of Certain Loss Contingencies -- An Analysis of the FASB's Proposed Changes (Revised February 1, 2011*) (No. 2010-32)8/3/10 | Assurance services
On July 20, 2010, the FASB issued an exposure draft of a proposed Accounting Standards Update, Contingencies -- Disclosure of Certain Loss Contingencies. The proposed disclosures in the exposure draft consist of qualitative and quantitative information about loss contingencies aimed at enabling financial statement users to understand their nature, potential magnitude, and potential timing (if known). This Dataline provides a summary of the proposal and includes PwC's insights on selected matters.
Dataline
Dataline: New Disclosure Requirements for Finance Receivables and Allowance for Credit Losses -- A Summary of ASU 2010-20 (No. 2010-31)7/29/10 | Assurance services
The FASB recently issued ASU 2010-20 to address concerns about the sufficiency, transparency, and robustness of credit risk disclosures for finance receivables and the related allowance for credit losses. The ASU requires that entities disclose information at disaggregated levels, specifically defined as "portfolio segments" and "classes." Among other things, the expanded disclosures include roll-forward schedules of the allowance for credit losses and information regarding the credit quality of receivables (including their aging) as of the end of a reporting period. Certain finance receivables that were modified during a reporting period and those that were previously modified and have re-defaulted require enhanced disclosures. The new...
Practical tip
Practical tip: Stand-Alone Financial Statements of Subsidiaries Whose Securities Serve as Collateral for Debt That Is Registered or Being Registered May Be Required in Registration Statements and Form 10-K (No. 2010-08)7/26/10 | Assurance services
This PwC Practical Tip serves as a reminder that Rule 3-16 of Regulation S-X requires certain filings to contain separate financial statements for each of a registrant's affiliates (e.g., consolidated subsidiaries) whose securities serve as a substantial portion of the collateral for any class of securities registered or being registered. These requirements are applicable to registration statements and Form 10-K but not Form 10-Q.
Dataline
Dataline: Accounting Implications of Recent Events in Venezuela (No. 2010-29)7/19/10 | Assurance services
In May 2010, the government of Venezuela effectively eliminated the indirect market of foreign currency exchange (referred to as the "parallel" market). On June 9, 2010, several large Venezuelan commercial banks began operating the Transaction System for Foreign Currency Denominated Securities ("SITME"). Continued use of the parallel market rate for re-measurement of bolivar denominated transactions is no longer acceptable. This Dataline provides an update on Venezuela being considered a highly-inflationary economy.
Practical tip
Practical tip: Accounting for Employee Termination Benefits - What Model Should Be Used? (No. 2010-07)6/15/10 | Assurance services
This Practical Tip provides some key considerations for determining which accounting model should be used to account for employee termination benefits. The different models are contractual termination benefits, special termination benefits, one-time employee termination benefits, or other postemployment benefits.
Dataline
Dataline: Impact of ASU 2009-16 and 2009-17 on Transfers of Trade Receivables -- On- vs. Off-Balance Sheet Treatment (No. 2010-27)6/12/10 | Assurance services
Companies often transfer trade receivables to fund working capital and liquidity needs. Examples of such transfers include factoring arrangements and transfers to bank-sponsored commercial paper conduits. The recent amendments to ASC 860, Transfers and Servicing, and ASC 810, Consolidation, have significantly altered the accounting analysis of trade receivable transfers, making it more likely that many structures used to effect such transfers will be accounted for as secured borrowings. The SEC staff recently weighed-in on the relevant cash flow classification issues that result from certain structures that meet sale accounting requirements. Structures continue to evolve in the marketplace and assessing these structures under the new...
Dataline
Dataline: Statement of Comprehensive Income--The FASB has proposed to require a new primary financial statement (No. 2010-26)6/11/10 | Assurance services
A second proposal recently released by the FASB would require a new primary financial statement, referred to as the statement of comprehensive income, that would replace the income statement. The new statement would contain subtotals for net income and other comprehensive income within a single continuous statement. The components of net income and other comprehensive income would not change as part of the proposal, and earnings-per-share would continue to be based on net income. The IASB has issued a similar proposal that calls for a statement of profit or loss and other comprehensive income. Although the components of other comprehensive income and the treatment of those components (i.e., recycling) vary between U.S. GAAP and IFRS,...
Dataline
Dataline: FASB Proposes Changes to Financial Instruments Accounting (No. 2010-25)6/10/10 | Assurance services
The FASB recently issued a proposal to overhaul the accounting requirements for financial instruments. Under the proposal, most financial instruments (including loans held by banks and held-to-maturity securities) would be measured at fair value with changes in fair value recognized in net income, unless an instrument qualifies and an entity elects to recognize the changes in fair value in other comprehensive income. Major changes to impairment and hedge accounting are also being proposed. As part of their convergence efforts, the FASB and IASB are jointly reconsidering the accounting for all financial instruments, however, the two boards so far have reached fundamentally different conclusions. This PwC Dataline provides an overview of...
Dataline
Dataline: XBRL: SEC Compliance Updates and Consideration of Upcoming Phase-In Requirements (No. 2010-24)5/27/10 | Assurance services
The second year of the SEC's XBRL mandate provides compliance challenges that impact nearly 2,000 of the world's largest public companies.áIn addition, many public companies are entering into their initial year of the mandate and can benefit from lessons learned by the first wave of companies. The SEC staff held a public seminar on March 23, 2010 and continues to update their compliance and disclosure interpretations and frequently asked questions to provide additional guidance about compliance with the final rules. Preparers will want to take advantage of the lessons learned to date as they plan to meet the upcoming requirements. This PwC Dataline describes recent guidance provided by the SEC staff and offers other helpful information...
Practical tip
Practical tip: Dividends Paid on Stock-Based Compensation Awards May Need to be Recorded as Additional Compensation Expense (No. 2010-06)5/25/10 | Assurance services
Dividends paid on underlying shares related to incentive awards while the award is outstanding or the restricted stock award is unvested may need to be recorded as compensation expense. The accounting depends on whether the award is classified as an equity or liability award and, if classified as an equity award, whether the award is expected to vest. In this Practical Tip, PwC highlights the appropriate accounting treatment.
Dataline
Dataline: Pension/OPEB Accounting -- An Analysis of the IASB's Exposure Draft (No. 2010-23)5/13/10 | Assurance services
The IASB has proposed changes to the accounting for defined benefit pensions and other postretirement benefits (OPEB). While the proposal is not the result of joint deliberations, the objective of the IASB and FASB is to eventually adopt a converged standard. Thus, the changes proposed by the IASB will be considered by the FASB for purposes of achieving convergence. This Dataline highlights the key provisions of the IASB's proposal and offers PwC's observations on it.
Dataline
Dataline: Disclosure of Certain Loss Contingencies -- A FASB Project Update (No. 2010-22)5/10/10 | Assurance services
The FASB originally issued an exposure draft of its proposal to require new disclosures about certain loss contingencies in June 2008, and received a high volume of feedback from the marketplace. Based on this feedback, the FASB began redeliberations on the proposal in August 2009 and continued redeliberations at its April 14, 2010 meeting. The approach the FASB is now considering would result in a major shift from the original proposal, and may alleviate concerns of many constituents that certain proposed disclosures in the original proposal would impact their legal strategies and be prejudicial to their cause. The FASB plans to expose a draft of the standard in May 2010 for a 30-day public comment period, and appears committed to...
Practical tip
Practical tip: Separate Financial Statement Disclosures for Subsidiary Guarantors or Subsidiary Issuers May be Required in Registration Statements and Annual and Quarterly Reports (No. 2010-05)4/18/10 | Assurance services
This PwC Practical Tip highlights that subsidiary guarantors of registered securities and subsidiary issuers of registered securities that are guaranteed by the parent company may be eligible for significantly reduced financial reporting requirements if the arrangement meets specified criteria.
Practical tip
Practical tip: Financial Statements May Need to be Revised and Reissued When Measurement Period Adjustments are Identified (No. 2010-04)3/25/10 | Assurance services
This PwC Practical Tip highlights that a company may need to revise and reissue previously-filed financial statements in connection with a new or amended registration statement, proxy/information statement, or private offering memorandum to reflect a purchase accounting adjustment identified during the measurement period.
M&A snapshot
The Consolidation Standard--determining who consolidates is just the beginning (M&A snapshot)3/11/10 | Assurance services
FASB Accounting Standard Codification Topic 810 incorporates FAS 167, Amendments to FASB Interpretation No. 46(R)), which is the U.S. standard on consolidation (the Consolidation Standard). The Consolidation Standard is effective as of January 1, 2010 for calendar year end companies and the impact will soon be reported in the first quarter reporting cycle. As a result of applying the new guidance, certain entities may need to be consolidated while other entities may need to be deconsolidated. Determining who consolidates is just the beginning.
Practical tip
Practical tip: Companies May Need to Enhance Their Disclosures Relating to Directors, Executive Compensation and Corporate Governance in Their Form 10-K and/or Proxy Statement (No. 2010-03)3/8/10 | Assurance services
This PwC Practical Tip highlights recent changes to the SEC's disclosure requirements relating to directors, executive compensation, and corporate governance. These disclosures are most commonly encountered in connection with proxy statements relating to annual shareholder meetings. For calendar year-end companies, the new disclosure requirements are generally effective February 28, 2010. That means calendar year-end companies that file their shareholder proxy statements on or after February 28, 2010 will need to consider the new disclosure requirements.
M&A snapshot
Accounting for contingent consideration - Don't let earnouts lead to earnings surprises (M&A snapshot)2/25/10 | Assurance services
In many M&A transactions, when the buyer and seller cannot agree on the total purchase price in an acquisition, the two parties agree to an additional payment, or contingent consideration, based on the outcome of future events. These payments are commonly referred to as earnouts and are typically based on revenue or earnings targets that the acquired company must meet after the acquisition date. The accounting for these arrangements under the M&A Standards represents a significant change from past practice.
Tax accounting insights
Goodwill impairment testing: Tax considerations12/21/09 | Tax accounting services
Goodwill impairment testing continues to be a challenging and complex area of practice. As companies perform goodwill assessments, tax considerations can play a critical role in the final conclusions. To assist you with your goodwill impairment testing, PwC has refreshed our Goodwill Impairment Testing: Tax Considerations publication (originally released in December 2009).
M&A snapshot
Acquired assets not intended to be used: You may need to record them, even if you don't use them! (M&A snapshot)11/30/09 | Assurance services
In many M&A transactions, a buyer may acquire assets it does not intend to use. Prior to the M&A Standards, buyers generally would assign little or no value to assets that are not intended to be used when accounting for an M&A transaction. Now, such assets are required to be recognized at fair value from a market participant perspective, even if that perspective differs from that of the actual buyer. One common type of asset that a buyer does not intend to actively use that is receiving considerable attention is called a "defensive asset."
Accounting guides
FASB Accounting Standards Codification Quick Reference Guide and Financial Instruments Supplement10/29/09 | Assurance services
To help you make the transition to the FASB Accounting Standards Codification, PwC has developed a Financial Instruments Supplement to be used along with its FASB Accounting Standards Codification Quick Reference Guide. The Financial Instruments Supplemen
M&A snapshot
Accounting for partial acquisitions and disposals - it's not so simple! (M&A snapshot)7/1/09 | Assurance services
Accounting for partial acquisitions and disposals - it's not so simple! In an economic environment where many companies are buying and selling portions of businesses, the M&A Standards will have an impact on how companies account for these types of transactions. At first glance, the fundamental concept of "control" that drives the accounting seems easy to understand. If a company gains control, the acquisition is a business combination. If a company loses control, it deconsolidates the subsidiary. If a company maintains control, the transaction is recorded in equity. Simple, right? Not so fast!
Tax accounting insights
Debt restructurings and bankruptcy: Accounting, tax and FAS 109 considerations6/4/09 | Tax accounting services
Current market conditions have precipitated efforts by companies, across industries and markets, to reduce or restructure their debt obligations.The transactions and events occurring in these settings can have significant and sometimes unique financial reporting consequences.This PwC publication provides an overview of these transactions and events from both a financial reporting and income tax perspective.
- FASB Codification on Comperio
5/12/09 | Assurance services
On July 1, the FASB launched the FASB Accounting Standards Codification as the single source of authoritative nongovernmental U.S. GAAP, combining and replacing the jumbled mix of accounting standards that have evolved over the last 50+ years. The FASB's
M&A snapshot
Doing a deal? Be careful about employee compensation decisions (M&A snapshot)4/1/09 | Assurance services
Doing a deal? How will you compensate employees of the target? The new M&A Standards may impact your decision. Determining whether employee arrangements represent compensation for service prior to and/or after the acquisition will have a direct impact on the amount included as purchase price versus the amount expensed in the future. This installment of Mergers & Acquisitions - A snapshot explores some of the more common issues related to employee compensation arrangements typically seen in business combinations... contingent consideration, golden parachutes and stay bonuses, and exchanges of stock compensation awards. Employee compensation decisions agreed upon during deal negotiations could impact the acquirer's future financial results.
M&A snapshot
Even your tax rate will change (M&A snapshot)3/1/09 | Assurance services
Are you ready for volatility in your effective tax rate? The new M&A standards will likely impact a company's effective tax rate. This impact will be felt by acquisitive companies in all industries, public and private, and as early as the first quarter of 2009 because parts of the new M&A standards apply to prior acquisitions. This installment of Mergers & Acquisitions—A snapshot focuses on how the accounting for merger and acquisition transactions will create volatility in an acquirer's effective tax rate in periods before and after an acquisition.
M&A snapshot
Deal or no deal: Why you should care about the new M&A standards (M&A snapshot)2/1/09 | Assurance services
Did you know that the new M&A standards could impact your company regardless of whether you plan to close a deal? Given the current economic environment, understanding the new M&A standards may not be a priority for many companies, particularly if M&A activity is not on the horizon in the foreseeable future. However, companies should be careful not to overlook the new M&A standards, as they may have a significant impact, even without a deal. This installment of Mergers & Acquisitions - A snapshot will help you avoid last-minute surprises by understanding how the new accounting and reporting standards for M&A may affect your financial reporting even though you haven’t closed a deal.
M&A snapshot
Goodwill impairment testing: What's old is new again (M&A snapshot)12/1/08 | Assurance services
Since the adoption of FAS 142, the goodwill impairment standard, the equity markets have generally trended upward. Accordingly, impairments may not have been as frequent as we expect to see them today. This edition of Mergers & Acquisitions - A snapshot, focuses on some of the issues companies may face in preparing goodwill impairment tests in the current environment. It also serves as a refresher on certain aspects of the framework for conducting those tests.
M&A snapshot
How timing your transactions in light of the new standards will impact your business and communication with stakeholders (M&A snapshot)10/1/08 | Assurance services
Recognizing that the new standards affecting mergers and acquisitions — FAS 141(R) and FAS 160 — will dramatically change the way companies negotiate and account for M&A, PwC has launched the first in a series of publications that will help companies keep abreast of emerging issues resulting from the new standards, as well as provide them with ideas on modifying current strategies and employing new ones for future deals. This first installment of Mergers & Acquisitions - A snapshot focuses on how the accounting treatment for M&A transactions will depend considerably on whether the deal closes before or after the effective date of the new standards.
Tax accounting insights
Stock option awards under IFRS: Tax accounting impacts earnings7/7/08 | Tax accounting services
PwC analysis of the potential impact of IFRS on shared-payment stock plans. An IFRS conversion may affect cash taxes and affect financial reporting systems and processes.
Tax accounting insights
More likely than not: A comparison of FIN 48 and the tax penalty standard6/2/08 | Tax accounting services
Efforts intended to strengthen objectivity and transparency with respect to tax planning, compliance and conflict resolution have converged around the use of a MLTN (more likely than not) standard. This PwC publication explores the FIN 48's more likely than not (MTLN) standard on whether a position taken, or expected to be taken, in a tax return is more likely than not to be sustained.