On September 18, 2013, the SEC voted 3 to 2 to propose a rule that would require public companies to calculate and disclose its CEO compensation as a multiple of the median employee’s pay. This In brief article provides an overview of the key provisions of the proposed rule.
The FASB and IASB met in July to discuss the constraint on recognizing revenue from variable consideration, customer credit risk, and accounting for arrangements that do not meet the definition of a contract with a customer.
On July 17, 2013, the FASB issued ASU No. 2013-10, which permits an entity to designate the Fed Funds Effective Swap Rate ("Fed Funds rate"), also referred to as the overnight index swap rate ("OIS"), as a benchmark interest rate. In addition, the ASU removes the restriction on using different benchmark interest rates for similar hedges. The ASU is effective immediately. This In brief article provides an overview of the final standard.
The IASB has published narrow-scope amendments to IAS 39, Financial instruments: Recognition and measurement. Similar provisions will be incorporated into the forthcoming chapter on hedge accounting in IFRS 9, Financial instruments. The amendments provide relief from parts of the hedge accounting requirements when a derivative is novated to a central counterparty (CCP), such as a central clearing organization, provided certain conditions are met.
The IASB has published a targeted revised exposure draft with a 120 day comment period that will fundamentally change the accounting by issuers of insurance contracts. Read our In brief article for more information on the exposure draft.
The FASB and IASB met in May to discuss sweep issues related to their revenue recognition project, including accounting for credit card reward programs. This In brief article provides a summary of the decisions reached by the boards.
The FASB met on May 23, 2013 to discuss feedback received on its repurchase agreement proposal. Based on the feedback received, the FASB tentatively decided to retain the current effective control model and require additional disclosures for transfers of financial assets with contemporaneous agreements that result in the transferor retaining the risks associated with the transferred financial asset.
The FASB and IASB issued a revised exposure draft on leases on May 16, 2013 with a comment period ending September 13, 2013. Almost all entities will be impacted. This In brief article provides an overview of the revised proposal.
The PCAOB reproposed a related parties auditing standard and amendments on significant unusual transactions and financial relationships with executive officers. This In brief article provides an overview of the key aspects of the reproposal.
On May 6, 2013, the FASB released an exposure draft proposing technical corrections and improvements to the FASB Accounting Standards Codification (the Codification). The proposal is part of the FASB's ongoing project to improve the Codification. This set of proposed changes is focused on improving the Codification’s master glossary. The proposed amendments are not intended to change U.S. GAAP. Instead, they are aimed at making the glossary easier to understand and reducing the number of glossary terms. This In brief article provides an overview of the proposal.
On April 30, 2013, the FASB issued a proposal that would indefinitely defer for nonpublic employee benefit plans certain quantitative fair value disclosures for investments in their plan sponsors' nonpublic entity equity securities. Comments on the FASB's exposure draft are due May 31, 2013. This In brief article provides an overview the FASB's proposal.
On April 22, the FASB issued Accounting Standards Update No. 2013-07, Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting. The new standard addresses when and how an entity should apply the liquidation basis of accounting. This In brief article provides an overview of the key provisions of the new standard.
On April 15, 2013, the Financial Accounting Standards Board (Board) and Private Company Council (Council) jointly issued an invitation to comment on a proposed private company decision-making framework (the "framework").
On April 12, the FASB issued an exposure draft of consequential amendments to the Accounting Standards Codification (ASC) that would result from its financial instruments classification and measurement proposal.
The FASB met on April 10, 2013 to discuss the costs, benefits, and complexity associated with the proposed lease accounting rules. The FASB members expressed their individual points of view and voted 4 to 3 in favor of moving forward with the revised exposure draft. The FASB and IASB expect to issue a joint exposure draft in mid-May 2013. This In brief article provides an overview of the decisions reached at the FASB meeting.
On April 2, 2013, the FASB issued a proposal that changes the criteria for reporting discontinued operations. The proposal also enhances disclosure requirements for discontinued operations and adds new disclosures for individually material dispositions that do not qualify as discontinued operations.
On March 26, the Public Company Accounting Oversight Board (PCAOB) proposed a framework for reorganizing the existing interim and PCAOB-issued auditing standards into a topical structure with a single integrated numbering system (the "Release"). In addition, the PCAOB is proposing certain related amendments to its rules and auditing standards, and proposing to rescind certain interim auditing standards that the PCAOB believes are no longer necessary under the proposed reorganization. The Release states that the amendments are not expected to impose new requirements on auditors or substantively change the requirements of the PCAOB standards.
On March 25, the FASB issued a document that addresses key questions about its proposed impairment model for financial assets. In addition, the FASB reached a decision at its March 28 meeting to extend the comment period for its impairment proposal to May 31, 2013.
The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) met separately in March to discuss specific U.S. GAAP and IFRS matters related to the proposed revenue recognition standard. The FASB focused on non-public entities and reached decisions on disclosure requirements, transition, and effective date. The FASB also amended its previous decision about effective date for public entities. The IASB decided to permit early application of the revenue standard. The decisions by both boards are tentative and subject to change. Any remaining “sweep” issues will be discussed at future meetings.
On March 13, 2013, the FASB met to discuss investment companies, a joint project with the IASB. The FASB discussed certain proposed disclosures designed to increase transparency into an investment company's interest in an investee fund. These investee fund disclosures have been the final area of focus as the FASB finalizes its standard on investment companies. At its meeting, the FASB decided to remove the proposed disclosures from the current project and re-evaluate them at a later date. The FASB also agreed to move forward with issuing a final standard on investment companies.
Following several years of discussions and two previously published proposals, the IASB has issued an exposure draft, Financial Instruments: Expected Credit Losses. The proposed guidance introduces an expected loss impairment model that will replace the incurred loss model used today. This In brief article provides an overview the IASB's proposal.
The IASB has issued an exposure draft proposing a limited scope amendment to IAS 39, Financial instruments: Recognition and measurement, and to the forthcoming chapter on hedge accounting in IFRS 9, Financial instruments. The exposure draft proposes some relief from the hedge accounting requirements when a derivative is novated to a central counterparty (CCP), such as a central clearing organization, under certain circumstances.
The FASB and IASB (the “boards”) reached decisions at their February 20 meeting on disclosure requirements, transition, and effective date for the revenue recognition standard. These decisions substantively conclude the boards' redeliberations on this project. The boards’ decisions are tentative and subject to change. Any remaining “sweep” issues will be discussed at future meetings.
On February 8, 2013, the Venezuela government announced that effective February 13, 2013 its currency would be devalued 32% and that the government-regulated rate mechanism referred to as the Transaction System for Foreign Currency Denominated Securities (SITME) market would be eliminated. The Venezuelan government also created a new department referred to as the Superior Body for the Optimization of the Exchange System to oversee foreign currency exchange policies. This In brief article highlights the key financial reporting impacts of these developments.
At its November 2012 meeting with the SEC staff, the Center for Audit Quality’s SEC Regulations Committee’s International Practices Task Force (IPTF) discussed whether South Sudan’s economy should be considered highly inflationary. The SEC staff affirmed that South Sudan’s economy should be treated as highly inflationary for US GAAP purposes no later than the first reporting period (including annual and interim periods) beginning on or after January 1, 2013. This In brief article describes why South Sudan is considered highly inflationary and highlights some of the financial reporting implications.
On February 14, the FASB issued a revised proposal for the classification and measurement of financial instruments. Classification and measurement is one part of the FASB and IASB’s broader financial instruments project. The other parts consist of impairment and hedge accounting. The IASB previously finalized its classification and measurement approach, but in late 2012, proposed targeted amendments to its guidance. This In brief article provides an overview of the proposal.
On February 12, the Private Company Council (Council) held its second meeting with the FASB (Board). Agenda items included discussing the private company decision-making framework (the "framework"), determining which projects to add to the Council’s technical agenda, selecting additional accounting topics for pre-agenda research, and providing input on selected current FASB projects.
On February 5, 2013, the FASB issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This guidance is the culmination of the board’s redeliberation on reporting reclassification adjustments from accumulated other comprehensive income. The new requirements will take effect for public companies in fiscal years, and interim periods within those years, beginning after December 15, 2012 (the first quarter of 2013 for public, calendar-year companies). This In brief article provides an overview of the key provisions.
The FASB decided at its February 6 meeting that certain guarantees issued by non-insurers, including certain financial guarantees issued by banks and other financial institutions, should be included in the scope of the proposed insurance contracts standard. The FASB’s tentative decision will be exposed for comment as part of its insurance contracts exposure draft. The exposure draft is expected by the end of the second quarter of 2013. This In brief article provides an overview of the FASB's tentative decision.
On January 31, 2013, the FASB issued Accounting Standards Update No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (the "ASU"). The ASU limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. This In brief article provides an overview of the scope clarification.
The FASB and IASB (the “boards”) decided at their January meeting to clarify the scope of the revenue standard, and they confirmed the accounting for repurchase agreements and performance fees by asset managers. They also confirmed that the accounting for transfers of non-financial assets that are not an output of an entity's ordinary activities should follow the guidance in the revenue recognition standard. This In brief article provides an overview of the boards' decisions and what's next.
On January 15, the FASB published for public comment an exposure draft to amend the accounting for repurchase agreements (aka “repos”) in an effort to identify those transactions that should be accounted for as a secured borrowing and to improve the associated accounting and disclosure requirements. The proposal will likely affect some companies that engage in certain types of repurchase agreements, including repos-to-maturity. It will also affect companies that engage in repurchase financing agreements and currently account for the components as a linked transaction. This In brief article provides an overview of the key provisions of the proposal.
At its January 9 meeting, the FASB discussed feedback on its exposure draft that proposes clarifications to the scope of the new balance sheet offsetting disclosures required by ASU 2011-11, Disclosures about Offsetting Assets and Liabilities. The exposure draft proposes that the offsetting disclosures only be applied to derivatives, repurchase agreements, and securities lending transactions to the extent that they are subject to a master netting arrangement or similar agreement. The FASB decided to clarify what would be considered a derivative for the purposes of the new offsetting disclosures and proceed with issuing the final scope clarification. This In brief article provides an overview of the board's decisions.
This week, the FASB issued a proposal that introduces a new model for accounting for credit losses on debt instruments. The proposal calls for an entity to recognize an allowance for credit losses based on its current estimate of contractual cash flows not expected to be collected. The FASB’s proposed model eliminates any threshold required to record a credit loss and allows entities to consider a broader information set when establishing their allowance for loan losses. In addition, the model aims to simplify current practice by replacing today’s multiple impairment models with one model that applies to all debt instruments. This In brief article provides an overview of the proposal.
On December 19, 2012, the FASB met to clarify the applicability of an exemption from a specific fair value disclosure for nonpublic entities. The board decided to clarify that all nonpublic entities are exempt from the requirement to disclose the categorization by level of the fair value hierarchy for items disclosed but not measured on the balance sheet at fair value. This In brief article provides an overview of the board's decision and what's next.
The FASB and IASB reached decisions at their December meeting on allocating the transaction price to separate performance obligations, applying the proposed model to bundled arrangements, constraining the cumulative amount of revenue recognized on licenses, and accounting for contract acquisition costs. The boards’ decisions are tentative and subject to change. This In brief article provides an overview of the boards' decisions and what's next.
On December 12, 2012, the FASB (the “board”) met to resume redeliberations on its discontinued operations project. The project had been inactive since early 2010 while the board focused on its higher priority projects. At this meeting, the board reaffirmed its previous decision about the definition of a discontinued operation, modified certain disclosure requirements, and directed its staff to issue a revised exposure draft as soon as possible.
On December 6, the Private Company Council (the Council) held its inaugural meeting with the FASB. Key agenda items for the meeting included (1) discussion of stakeholder feedback on the Private Company Decision-Making Framework, (2) the direction of the Council's technical agenda, and (3) the official transition from the Private Company Financial Reporting Committee (PCFRC) to the Council. This In brief article provides an overview of the Council and FASB's discussion of each of these items.