This week's PwC update on financial reporting developments includes: In depth: FASB revises consolidation accounting... BoardroomDirect - June 2014... BoardroomDirect Special Edition (ProxyPulse, second edition 2014)... 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:
In depth: FASB revises consolidation accounting
The FASB issued a new standard in June 2014 to eliminate the concept of a development stage entity (DSE) from today’s accounting guidance in its entirety. While originally the project was aimed at eliminating the incremental reporting requirements for DSEs, the consolidation guidance was also amended, impacting all companies that invest in these entities. In most cases, a different analysis will be required by an investor to determine if it should consolidate one of these entities. This, in turn, could cause changes in consolidation conclusions. Regardless of the conclusions, incremental disclosures will apply. The change to the consolidation analysis is effective from the beginning of 2016 for calendar year-end public companies. This In depth summarizes the new standard.
BoardroomDirect - June 2014
The June 2014 edition of BoardroomDirect discusses when a company might become the target of an activist investor, and if that does happen, what the company should do and how it can be ready if an activist shareholder (often a hedge fund) comes knocking. BoardroomDirect also includes short items on: (1) a Delaware Senate proposal to prohibit a bylaw that shifts legal fees to unsuccessful plaintiffs, (2) a letter sent by some environmental groups to large insurers suggesting directors could be held personally liable for climate-change related litigation, (3) the IASB’s and FASB’s adoption of a new converged revenue recognition standard, (4) PCAOB’s adoption of standards on related parties and related amendments, and (5) the first round of conflict minerals disclosures.
BoardroomDirect Special Edition (ProxyPulse, second edition 2014)
PwC's Center for Board Governance (CBG) issued a Special edition of BoardroomDirect, the Center’s newsletter for directors and executives. The Special edition announces the newly released ProxyPulse, a collaboration of the CBG and Broadridge Financial Solutions. ProxyPulse provides data and analysis on voting trends in the current proxy season and identifies key trends of the 2014 season covering 2,788 shareholder meetings held between January 1 and May 22, 2014, along with comparative data from the 2013 season.
FASB meetings and project updates
Meeting summary: The FASB did not hold any board meetings this week.
Next open board meetings: The FASB will not hold any board meetings next week. The next FASB meeting is scheduled for July 16. The topics for this meeting will be announced next week on the FASB’s website.
Project updates: The FASB has updated the summary of its projects on:
IASB issues amendments to IAS 16 and IAS 41 for bearer plants
The IASB issued amendments that change the financial reporting for bearer plants, such as grape vines, rubber trees and oil palms.
IAS 41 Agriculture currently requires all biological assets related to agricultural activity to be measured at fair value less costs to sell. However, there is a subset of biological assets, known as bearer plants, which are used solely to grow produce over several periods. The IASB decided that bearer plants should be accounted for in the same way as property, plant and equipment in IAS 16, Property, Plant and Equipment, because their operation is similar to that of manufacturing. Consequently, the amendments include them within the scope of IAS 16, instead of IAS 41. The produce growing on bearer plants will remain within the scope of IAS 41.
Entities are required to apply the amendments for annual periods beginning on or after January 1, 2016. Earlier application is permitted.
IFRS for SMEs Update — June 2014
This edition of the IASB's IFRS for SMEs Update addresses various items such as (1) end of the second term of the SMEIG, (2) IFRS Foundation appoints one more member of the SMEIG, (3) upcoming ‘train the trainers’ workshops, (4) status report of IFRS for SMEs translations, and (5) where to obtain IFRS for SMEs materials.
PCAOB releases staff guidance for auditors of SEC-registered brokers and dealers
The PCAOB released staff guidance to help auditors of brokers and dealers registered with the SEC to plan and perform audits in accordance with PCAOB standards as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC rules. The staff guidance highlights relevant requirements for SEC-registered broker-dealer audits and attestation engagements, and provides guidance on the application of PCAOB standards to these engagements, particularly for audits of smaller broker-dealers with less complex operations.
Additional ASB interpretations address GASB pension issues
The AICPA Auditing Standards Board (ASB) issued two interpretations that are designed to help governmental pension plans, participating employers, and their auditors as they implement new GASB standards:
The table in the attachment lists meetings of standard-setting bodies, PwC webcasts and other events occurring in July 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.