This week's PwC update on financial reporting developments includes: 10Minutes on integrated reporting... Private company reporter: PCC continues discussions on intangible assets... BoardroomDirect: April 2014... SEC issues guidance on conflict minerals disclosures... and more
PwC's weekly alert highlighting current financial reporting developments (including accounting, auditing and regulatory matters).
This week's topics include:
10Minutes on integrated reporting
Investors have been showing increased interest in the correlations between financial performance and sustainability factors like resource scarcity, environmental performance and corporate governance when assessing a company’s future risk and growth opportunities. Is your company ready to respond? This 10Minutes highlights insights and benefits companies can glean into these issues by integrating their thinking to develop a better understanding of impacts to their businesses, allowing them to tell a more holistic value creation story.
Private company reporter: PCC continues discussions on intangible assets
At its April 29 meeting, the Private Company Council (PCC) continued its redeliberations of an accounting alternative for the recognition of intangible assets in a business combination. The PCC did not approve an accounting alternative and is expected to continue its deliberations on this topic at its next meeting in July.
Separately, the PCC voted to add a project to its technical agenda related to the second phase of its project on the definition of a public business entity. The goal of the second phase is to find opportunities to reduce the number of definitions of a public entity in the FASB Codification Master Glossary, leveraging the new definition of a public business entity, as defined in Accounting Standards Update No. 2013-12, Definition of Public Business Entity – An Addition to the Master Glossary.
This edition of Private company reporter provides further information on the meeting.
BoardroomDirect: April 2014
The April 2014 edition of BoardroomDirect takes a look at the proposed changes to the auditor’s reporting model, including viewpoints of some who spoke at the PCAOB’s recent audit regulator’s public meeting. The newsletter also includes short items on: (1) the federal cybersecurity framework being a starting point for companies, (2) views on raising the ownership threshold needed to file shareholder proposals, (3) an update on the SEC and proxy advisory firms, (4) EU’s move to further its path to controversial audit reforms, (5) PwC’s release of the 2014 State of the Internal Audit Profession Study, and (6) a federal court upholding most of the SEC conflict minerals disclosure rule (also see the SEC section below).
SEC issues guidance on conflict minerals disclosures
The SEC’s Division of Corporation Finance issued a statement confirming the existing filing deadline for SEC issuers subject to Exchange Act 13p-1 (the “Conflict Minerals Rule”). The statement also explained that, due to a recent court decision, issuers are not required to disclose the conflict status of conflict minerals in their products, but the majority of the Conflict Minerals Rule’s other disclosure requirements remain intact. With the June 2, 2014 filing deadline quickly approaching, the court decision and subsequent guidance from the SEC provides affected issuers the information they need to finalize their SEC filings.
For more information, see PwC's In brief article which provides an overview of the court decision and the SEC's guidance.
FASB issues exposure draft on pushdown accounting
The FASB has published an exposure draft on the application of pushdown accounting in separate financial statements. The proposal represents a consensus for exposure reached by the EITF at its March 2014 meeting.
Current U.S. GAAP offers limited guidance for determining whether and when a new accounting and reporting basis (pushdown accounting) should be established in an acquiree's (acquired entity's) separate financial statements. The SEC staff's guidance is applicable to SEC registrants, but diversity in practice exists with respect to the application of pushdown accounting among entities that are not SEC registrants. In addition, practice issues exist in the application of pushdown accounting for all entities as a result of the limited guidance. The objective of the proposal is to provide guidance on when and how an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements.
Comments are requested by July 31, 2014.
Also see the March 2014 edition of PwC’s EITF observer for an overview of this Issue.
FASB meetings and project updates
Meeting summary: The FASB met on April 28 and discussed the results of staff research on four potential projects and decided to add the following two projects to its agenda: (1) presentation issues in the statement of cash flows and (2) fees paid by a customer in a cloud computing arrangement. See the FASB’s website for the board’s meeting summary.
Next open board meetings: The following meetings will be held next week:
See the FASB’s website for further information on the meetings.
Private company council (PCC) town hall meeting – The FASB and the PCC will host a private company town hall meeting on May 8 at the University of Washington in Seattle, Washington, to provide private company stakeholders with the opportunity to discuss private company accounting issues on current and future agenda topics of both the FASB and the PCC. See the FASB’s website for further information on the meeting.
Project updates: The FASB has updated the summaries of its projects on:
IASB Update — April 2014
This issue of IASB Update, issued by the IASB staff, provides a summary of the IASB’s March 13-21 meetings. Some of the topics discussed were: (1) leases, (2) narrow-scope amendments—IFRS 10 and IAS 28, (3) rate-regulated activities, (4) equity method in separate financial statements, (5) conceptual framework, (6) insurance contracts, (7) disclosure initiative, and (8) narrow-scope amendments—IFRS 2.
IFRS for SMEs Update — April 2014
This edition of the IASB's IFRS for SMEs Update includes various items such as (1) an update on selection process of membership of the SME Implementation Group, (2) a status report of IFRS for SMEs translation, and (3) where to obtain IFRS for SMEs materials.