This week's PwC update on financial reporting developments includes: PwC guide: Revenue from contracts with customers — 2014 global edition... In depth: IFRS 9, Financial Instruments - Classification and measurement and Expected credit losses... Save the date: Q3 2014 Current Accounting and Reporting Developments webcast — Wednesday, September 17... and more
PwC's weekly alert highlighting current financial reporting developments (including accounting, auditing and regulatory matters).
This week's topics include:
PwC guide: Revenue from contracts with customers — 2014 global edition
In May 2014, the FASB and IASB issued their converged standard on revenue from contracts with customers (ASU 2014-09 and IFRS 15). Our new accounting and financial reporting guide for Revenue from contracts with customers - 2014 global edition begins with a summary of the new five-step revenue recognition model. The ensuing chapters further discuss each step of the model, highlighting key aspects of the standard and providing examples to illustrate application of the guidance. Relevant references to and excerpts from both the FASB and IASB standards are interspersed throughout the guide. The guide also discusses the new disclosure requirements and the effective date and transition provisions.
In depth: IFRS 9, Financial Instruments - Classification and measurement and Expected credit losses
On July 24, 2014 the IASB published the complete version of IFRS 9, Financial Instruments, which replaces most of the guidance in IAS 39. This includes amended guidance for the classification and measurement of financial assets by introducing a fair value through other comprehensive income category for certain debt instruments. It also contains a new impairment model which will result in earlier recognition of losses. These changes are likely to have a large impact on entities that have significant financial assets and in particular financial institutions.
IFRS 9 will be effective for annual periods beginning on or after January 1, 2018, subject to endorsement in certain territories.
The following In depth publications summarize the IFRS 9 classification and measurement and expected credit losses models:
Save the date: Q3 2014 Current Accounting and Reporting Developments webcast — Wednesday, September 17
We invite you to join us for this quarter's 'Current Accounting and Reporting Developments' webcast at 1:00 p.m. EDT on Wednesday, September 17. The 90-minute webcast features insights from a broad range of PwC specialists who will update you on the current state of technical topics and emerging issues that may impact your business. The webcast will provide 1.5 CPE credits to participants.
We invite you to pre-register for the webcast through the CFOdirect Network.
Save the date: Corporate divestitures webcast — Monday, September 15
We invite you to join us for our 'Corporate divestitures' webcast at 1:00pm EDT on Monday, September 15. This 60 minute webcast is part 3 of our Accessing the capital market series which will focus on carve-out transactions and will discuss trends in the divestiture market as well as how to manage the divestiture process. Our PwC specialists will also outline key issues and accounting considerations, explore SEC reporting requirements, and provide key takeaways for participants. The webcast will provide 1.0 CPE credit to participants.
We invite you to pre-register for the webcast through the CFOdirect Network.
IFRS news — July/August 2014
This issue of IFRS news looks at (1) IFRS 9 - the IASB's new standard on financial instruments, (2) Revenue Transition Resource Group (TRG) starts discussion on IFRS 15, Revenue from contracts with customers, (3) The European Securities and Markets Authority (ESMA) reports on accounting for business combinations under IFRS 3, (4) IAS 41 and IAS 16 amendments on bearer plants, (5) EU endorses IFRIC 21, Levies, (6) leasing redeliberations, (7) disclosure initiative, (8) conceptual framework discussions, and (9) Q&As: related parties.
FASB issues final guidance on classification of certain government-guaranteed mortgage loans upon foreclosure
The FASB has published Accounting Standards Update (ASU) No. 2014-14, Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure, to codify the consensus reached by the FASB’s Emerging Issues Task Force (EITF) at its June 2014 meeting.
Upon foreclosure of mortgage loans, within the scope of the guidance, a creditor will be required to reclassify the previously existing mortgage loan to a separate other receivable from the guarantor, measured at the amount of the guarantee that it expects to collect.
The effective date will be for fiscal years, and interim periods within those years, beginning after December 15, 2014 for public business entities. For all other entities, the effective date will be for fiscal years ending after December 15, 2015, and interim periods thereafter.
Also see the June 2014 edition of PwC’s EITF observer for an overview of the new guidance.
FASB issues UGT implementation guides
The FASB issued a final 2014 U.S. GAAP Financial Reporting Taxonomy (UGT) Implementation Guide that provides examples to help users understand the modeling for disclosures of reinsurance-related concentrations of credit risk.
The FASB also issued a proposed 2015 UGT Implementation Guide that provides examples of modeling disclosures related to disposal groups and discontinued operations. Comments on this Guide are requested by October 6, 2014.
FASB meetings and project updates
Meeting summary: The FASB met on August 13. The board discussed the results of staff research and analysis of several potential new projects and decided which, if any, met the criteria to be added to the agenda. The board also discussed its projects on (1) financial instruments—impairment and (2) insurance—disclosures about short-duration contracts. See the FASB’s website for the board’s meeting summary.
Next open board meeting: The FASB will meet on August 20. The board will discuss its projects on (1) financial instruments—classification and measurement, and (2) disclosure framework: disclosure review—defined benefit plans. See the FASB’s website for the board’s meeting agenda.
Project updates: The FASB has updated the summary of its project on:
SEC proposes to extend exemption from conflict-of-interest rules for investment advisers
The SEC has issued a proposed rule to amend rule 206(3)-3T under the Investment Advisers Act of 1940, a temporary rule that establishes an alternative means for investment advisers that are registered with the Commission as broker-dealers to meet the requirements of section 206(3) of the Investment Advisers Act when they act in a principal capacity in transactions with certain of their advisory clients.
The amendment would extend the date on which rule 206(3)-3T will sunset from December 31, 2014 to December 31, 2016.
Comments must be received on or before 30 days after publication in the Federal Register.
IASB publishes narrow-scope amendments to IAS 27, Separate Financial Statements
The IASB published narrow-scope amendments to IAS 27, Equity Method in Separate Financial Statements. The amendments to IAS 27 will allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements. The amendments are effective for annual periods beginning on or after January 1, 2016, with earlier application being permitted.
IESBA eNews — August 2014
This issue of IESBA eNews provides a summary of decisions reached at the July 7-9, 2014, meeting of the IFAC's International Ethics Standards Board for Accountants (IESBA). Some of the topics discussed were: