This week's PwC update on financial reporting includes: Dataline: FASB proposes to eliminate development stage entity reporting and amend the consolidation guidance... BoardroomDirect: December 2013... SEC issues staff report on public company disclosure... FASB meetings and project updates... and more.
PwC's weekly alert highlighting current financial reporting developments (including accounting, auditing and regulatory matters).
This week's topics include:
Dataline: FASB proposes to eliminate development stage entity reporting and amend the consolidation guidance
In November 2013, the FASB issued a proposal to eliminate in its entirety the concept of a DSE (development stage entity) from today’s accounting guidance. If adopted, entities that are in their development stage would no longer be required to present and disclose incremental information, such as inception-to-date information.
The proposal includes a consequential amendment to the consolidation guidance that would cause more DSEs to be considered variable interest entities (VIEs). This would require entities that have a variable interest in a DSE to apply the more complex VIE consolidation analysis and in certain situations consolidation conclusions could change. Incremental VIE disclosures would also be required.
Dataline: Accounting for centrally cleared derivatives—Understanding the implications of Dodd-Frank Title VII
Dodd-Frank Title VII (Dodd-Frank) significantly changed the trading requirements for derivative instruments, such as mandating that certain derivatives be centrally cleared.
A number of financial reporting implementation questions have arisen as companies consider the Dodd-Frank requirements. These include determining fair value of centrally cleared derivatives, accounting for collateral, assessing the impact on hedge accounting, and determining the appropriate presentation (gross versus net).
Our Dataline discusses the financial reporting implications of the new requirements, primarily focusing on end-users that trade in the affected derivatives and who do not qualify for the end-user exception.
In brief: FASB financial instruments project–Convergence no longer likely
At its December 18 meeting, the FASB made two significant decisions in its financial instruments projects that reduce the likelihood of convergence with the IASB.
Both of these decisions diverge from the IASB’s approach in their parallel projects, leaving the prospects for convergence in jeopardy.
This In brief article provides more information on the FASB's decisions.
In brief: FASB reaches final conclusions on repurchase agreement project
At its December 18 meeting, the FASB finalized certain tentative decisions reached at its last meeting, and made significant changes to several others. The board decided not to move forward with changes related to the accounting for dollar rolls. The board also decided to retain the disclosures highlighting “asset quality” that were proposed in the exposure draft issued in January 2013.
This In brief article provides an overview of the key decisions made by the FASB.
BoardroomDirect: December 2013
The December 2013 edition of BoardroomDirect provides a synopsis of PwC’s Key considerations for board and audit committee members, 2013-2014 edition. That publication offers insight into major issues facing directors, such as strategy, emerging technologies and Big Data, risk oversight, the talent pipeline, corporate ethics, the financials, and stakeholder communications. The newsletter also includes short items on: (1) NASDAQ asking for more flexible compensation committee independence standards, (2) ISS changing its voting policy on directors who don’t respond to successful shareholder proposals, (3) Highlights of the 2013 AICPA National Conference on Current SEC and PCAOB Developments, and (4) The PCAOB’s rule that would require the disclosure of the lead audit partner’s name.
IFRS news—December 2013/January 2014
This issue of IFRS news looks at (1) IFRS 9 hedging project, (2) revised pension changes, (3) 10 key reminders for 2013 year-ends, (4) IAS 27 narrow scope amendments, (5) ESMA enforcement decisions, (6) IIRC integrated reporting framework, (7) IFRS 9 deliberations, and (8) annual improvements.
FASB issues final guidance on the definition of a public business entity and PCC private company framework
The FASB and the Private Company Council (PCC) issued the final Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies (informally called the Guide). The Private Company Decision-Making Framework is intended to assist the FASB and the PCC in determining whether and when to provide alternative recognition, measurement, disclosure, display, effective date, or transition guidance for private companies reporting under US GAAP.
The FASB also issued Accounting Standards Update No. 2013-12, Definition of a Public Business Entity: An Addition to the Master Glossary, which amends the Master Glossary of the FASB Codification to include one definition of public business entity for future use in US GAAP. The definition does not affect existing requirements. It will be used by the FASB, the PCC, and the Emerging Issues Task Force (EITF) to determine the scope of new accounting and reporting guidance and to identify the types of companies that are excluded from the scope of the Guide.
FASB meetings and project updates
Meeting summary: The FASB did not hold any board meetings in the past week.
Next open board meeting: The FASB will meet on January 8. The board plans to discuss its project on consolidation—principal versus agent analysis. See the FASB’s website for further information on the meeting.
Project updates: The FASB has updated the summaries of its projects on:
SEC issues staff report on public company disclosure
The SEC has published a staff report to Congress on its disclosure rules for US public companies, as part of the agency’s ongoing efforts to modernize and simplify disclosure requirements and reduce compliance costs for emerging growth companies. The report, mandated by Congress in the 2012 Jumpstart Our Business Startups (JOBS) Act, offers an overview of the SEC’s Regulation S-K that governs public company disclosure, as well as the staff’s preliminary conclusions and recommendations.
As part of this effort, the SEC’s Office of the Chief Accountant will coordinate with the FASB to identify ways to improve the effectiveness of disclosures in corporate financial statements and to minimize duplication with other existing disclosure requirements.
IFRS for SMEs Update — December 2013
This edition of the IASB's IFRS for SMEs Update includes various items such as (1) a progress chart of global adoption of full IFRS and the IFRS for SMEs, (2) a status report of IFRS for SMEs translation, and (3) where to obtain IFRS for SMEs materials.
IFAC News — December 2013 / January 2014
This edition of IFAC News includes updates from the standard-setting boards, committees, and leadership as well as coverage of recent IFAC events. Some of the topics addressed include:
IESBA eNews — December 2013
This issue of IESBA eNews provides a summary of decisions reached at the December 4-6, 2013, meeting of the IFAC's International Ethics Standards Board for Accountants (IESBA). The topics discussed were:
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, visit CFOdirect Network (www.cfodirect.pwc.com), PwC’s online resource for financial executives.