This week's PwC update on financial reporting developments includes: In brief: IASB issues discussion paper on macro hedging... FASB meetings... SEC staff issues updated compliance and disclosure interpretations on Securities Act Rules... Key dates in May... and more
PwC's weekly alert highlighting current financial reporting developments (including accounting, auditing and regulatory matters).
This week's topics include:
In brief: IASB issues discussion paper on macro hedging
As highlighted in last week’s Flashline, the IASB issued a discussion paper on accounting for dynamic risk management strategies on open portfolios. The discussion paper explores the use of a portfolio revaluation approach, which (1) does not require a 1-to-1 matching of the hedge item and hedging instrument and (2) allows the inclusion of behavioral features. The DP will be of interest to financial institutions and possibly industries such as mining, utilities and manufacturing. This In brief article highlights some of the key proposals of the discussion paper.
Meeting summary: The following board meetings were held over the past week:
Next open board meeting: The FASB will meet on April 28 to discuss whether to add one or more of the following potential projects to the FASB or Emerging Issues Task Force (EITF) agenda:
See the FASB’s website for further information on the meeting.
Private company council (PCC) meeting: The FASB and PCC will meet on April 29 and discuss the following: (1) Issue No. 13-01A, Accounting for Identifiable Intangible Assets in a Business Combination,(2) selected FASB projects, and (3) PCC agenda direction. See the FASB’s website for further information on the meeting.
SEC staff issues updated compliance and disclosure interpretations on Securities Act Rules
The SEC's Division of Corporation Finance (Corp Fin) published new and revised questions to its Compliance and Disclosure Interpretations (C&DIs) publication on Securities Act Rules. Question 164.02 was added under Section 164, Rule 165 — Offers made in connection with a business combination transaction. Questions 110.01 and 110.02 were added under Section 110, Rule 134 – Communications not deemed a prospectus. Questions 232.15 and 232.16 were added under section 232, Rule 433—Conditions to permissible post-filing free writing prospectuses.
SEC staff releases FAQs to address amendments to broker-dealer reporting and audit requirements
The SEC staff published frequently asked questions (FAQs) to provide guidance concerning the amendments to the broker-dealer reporting rule, Rule 17a-5 under the Exchange Act. The new rules are intended to provide additional safeguards, strengthen audit requirements, and enhance oversight in the way broker-dealers maintain custody of their customers’ assets.
SEC staff addresses questions about risk management controls for broker-dealers with market access
The SEC staff released FAQs about Rule 15c3-5, which requires broker-dealers with market access to establish, document, and maintain a system of risk management controls and supervisory procedures designed to manage financial, regulatory, and other risks of market access activity.
AICPA issues auditing interpretations related to new GASB pension standards
The AICPA has published the following auditing interpretations to assist plan and employer auditors who are auditing entities that have implemented the new GASB pension standards, GASB Statements No. 67 and No. 68. GASB Statement No. 67 is effective for financial statements for periods beginning after June 15, 2013. GASB Statement No. 68 is effective for financial statements for fiscal years beginning after June 15, 2014.
AICPA issues Q&A on attributes of conflict minerals reports
The AICPA Conflict Minerals Task Force has published a new question and answer (Q&A .13) that addresses the attributes of a conflict minerals report that will facilitate an independent private-sector audit. The guidance also describes the use of various section headings and subheadings within the two sections that are expected to appear in a conflict minerals report based on the instructions to the SEC’s Form SD. Accompanying the Q&A is a an exhibit that depicts a conflict minerals report that illustrates other headings that might also be included.
CAQ issues paper outlining approach to audit quality indicators
The Center for Audit Quality (CAQ) published a new paper titled CAQ Approach to Audit Quality Indicators, which represents a two-year effort with its member firms to develop perspectives regarding which indicators may be most relevant and how they should be communicated to stakeholders. The paper sets forth in detail the CAQ’s thoughts on the right approach to communicate a set of potential Audit Quality Indicators (AQIs), which will be pilot tested by CAQ member firms with select audit committees. The CAQ Approach to Audit Quality Indicators is based on two key elements: (1) communications of AQIs should be directed at audit committees and (2) communication of AQIs should be focused largely on engagement-specific indicators.
IAASB re-proposes standard addressing information in annual reports: further clarifies auditor effort and reporting responsibilities
IFAC's International Auditing and Assurance Standards Board (IAASB) released for re-exposure an enhanced International Standard on Auditing (ISA) 720 (Revised), The Auditor’s Responsibilities Relating to Other Information. The proposed standard aims to clarify and strengthen the scope and focus of auditor efforts on information included in entities’ annual reports, other than the audited financial statements, and introduces new auditor reporting responsibilities. The exposure draft provides requirements and guidance on the scope of other information, the auditor’s work effort related to other information, and the auditor’s associated reporting responsibilities.
Comments are requested by July 18, 2014.
The table in the attachment lists meetings of standard-setting bodies, PwC webcasts and other events occurring in May 2014 that may be of interest to you. Click on the name of the meeting, webcast or event for more information. For additional events, see the events calendar on PwC's CFOdirect Network.