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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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...
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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!