PwC's weekly alert highlighting current financial reporting developments (including accounting, auditing and regulatory matters).
This week's topics include:
The quarter close — A look at this quarter’s financial reporting issues—Q2 2013
This edition of The quarter close and related video perspectives highlight the most significant financial reporting and regulatory updates for the quarter, and provides insight into what developments are coming in the near future. Here’s some of the things you’ll find in this edition:
Regulatory and standard setting developments—June 2013
This issue of Regulatory and Standard-Setting Developments provides a high-level summary of activities of the FASB, PCAOB, SEC, 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—June 2013
At its June 11 meeting, the FASB’s Emerging Issues Task Force (EITF) finalized consensuses on issues affecting interest rate hedges and uncertain tax benefits. It also reached consensuses-for-exposure on issues affecting collateralized financing entities, service concession arrangements, and collateralized mortgage loans. Discussions also began on an issue involving share-based awards with performance targets.
If the final consensuses are ratified by the FASB at its June 26 meeting, those decisions will amend current US GAAP, and the changes may be adopted as early as 2013.
This edition of EITF observer provides a synopsis of the discussions and decisions reached at the June 11 EITF meeting.
PwC comments on FASB’s and PCC’s proposed Private Company Decision-Making Framework
In our comment letter on the FASB’s and the Private Company Council’s (PCC’s) Invitation to Comment on their proposed Private Company Decision-Making Framework, we generally believe the guide identifies the appropriate matters to consider when determining whether a modification to U.S. GAAP should be made available to private companies. The draft guide identifies the significant differentiating factors that could support financial reporting differences between public and private companies.
Given that the accounting that is relevant to users of public company financial statements is also generally relevant to users of private company financial statements, we believe that modifications to the recognition and measurement guidance for private companies should be rare and limited to instances where private and public company financial statement users have clearly different information needs. When determining whether this is the case, we agree that more weight should be placed on the relevance to users of financial information than the cost and complexity for preparers. Differences in disclosure requirements, transition methods and effective dates could reduce costs for private companies without compromising the relevance of the information provided to users.
We agree with the approach in the draft guide which would generally allow a private company to select the alternatives within recognition or measurement guidance that it deems appropriate to apply, without having to apply all alternatives.
Lastly, we agree that when the board and PCC identify cost-effective alternatives for private companies, this may benefit the board’s standard setting activities for public companies, not-for-profit entities and employee benefit plans.
FASB meetings and project updates
Meeting summaries: The FASB held the following board meetings over the past week:
Next open board meetings: The FASB will meet on June 26 to decide whether to ratify the two consensuses and three consensuses-for-exposure reached at the June EITF meeting. See the FASB’s website for further information on the meeting.
Project updates: The FASB has updated its summary of its project on fair value measurement disclosures of private company equity securities by employee benefit plans.
IFAC and CIPFA seek comments on public sector governance
IFAC and the Chartered Institute of Public Finance and Accountancy (CIPFA) issued for public comment a consultation draft for an international framework on governance in the public sector. The draft, titled Good Governance in the Public Sector, encourages better service delivery and improved accountability by establishing a benchmark for good governance in the public sector.
The framework is not intended to replace national and sectoral public sector governance codes. Instead, it is designed as a reference document for those who develop and set national governance codes for the public sector when updating and reviewing their own codes. Where codes and guidance do not exist, the framework provides a shared understanding of what constitutes good governance in the public sector and a powerful stimulus for positive action.
Comments are requested by September 16, 2013.
Flashline is a weekly alert highlighting current financial-reporting developments (including accounting, auditing and regulatory matters) and is produced by the National Professional Services Group of PwC. It is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. To access additional content on financial reporting issues, register for CFOdirect Network (www.cfodirect.pwc.com), PwC’s online resource for financial executives.