Practical tip
Highlights an important element of existing financial reporting along one or more practical examples
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Practical tip
Practical tip: Changes in percentage-of-completion contract estimates -- disclosure requirements and considerations (No. 2012-04)7/18/12 | Assurance services
This Practical tip highlights the U.S. GAAP disclosure requirements and considerations relating to changes in contract estimates when using the percentage-of-completion method of accounting.
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Practical tip
Practical tip: Undistributed foreign earnings: disclosure requirements and considerations (No. 2012-03)6/19/12 | Assurance services
Undistributed foreign earnings that are indefinitely reinvested outside the United States result in a significant unrecorded tax liability for many U.S.-based multinationals. The amount of undistributed foreign earnings has grown substantially in recent years. As a result, expectations for transparency have increased along with concerns about a lack of comparability or consistency in disclosures. This Practical tip focuses on the U.S. GAAP disclosure requirements and considerations relating to undistributed foreign earnings.
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Practical tip
Practical tip: An emerging growth company should evaluate whether it needs to make disclosures relating to transition to new or revised accounting standards in its next SEC filing (No. 2012-02)4/24/12 | Assurance services
Ordinarily, a company preparing an SEC filing must apply all accounting standards (including transition provisions) as if it had always been a public company. The JOBS Act of 2012, however, provides an exception to this general rule. Under Section 102(b) of the JOBS Act, an emerging growth company (EGC) may apply any new or revised financial accounting standard on the same date a company that is not an issuer (as defined in the Sarbanes-Oxley Act) is required to apply the new or revised accounting standard, if the standard applies to a non-issuer. This Practical tip highlights that an EGC should evaluate whether it needs to make disclosures relating to transition to new or revised accounting standards in its next SEC filing.
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Practical tip
Practical tip: Disclosing total comprehensive income in condensed consolidating financial information and parent company-only financial information (Revised May 3, 2012*) (No. 2012-01)4/4/12 | Assurance services
Upon adoption of the FASB's new comprehensive income presentation requirements (ASUs 2011-05 and 2011-12), an entity should report a total for comprehensive income in condensed consolidating financial information and parent company-only financial information in a single continuous statement or in two separate, but consecutive, statements. This Practical tip further explains this guidance and includes examples to help you apply it in practice.
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Practical tip
Practical tip -- Interim period determination of tax expense or benefit when a company reports discontinued operations (No. 2011-04)9/15/11 | Assurance services
In a company's annual financial statements, a three-step incremental approach -- commonly referred to as a "with and without" approach -- is used to allocate the annual period's tax provision (benefit) to continuing operations and other components of comprehensive income and shareholders' equity. This Practical tip summarizes the considerations and provides an example of applying the "with and without" model in interim periods.
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Practical tip
Practical tip: Deferred tax accounting implications of holding gains from obtaining control of a foreign investee (No. 2011-03)6/16/11 | Assurance services
When a company obtains control of a foreign investee, it remeasures its previously held equity interest to fair value and recognizes a holding gain in income. This holding gain will generally not result in a current tax event. This Practical tip explains the requirement to freeze any previously recorded deferred tax liability and an accounting policy election that may be available in relation to recording deferred taxes on such holding gains.
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Practical tip
Practical tip: Companies may need to include separate equity method investee financial information in their interim financial statements (No. 2011-02)4/12/11 | Assurance services
Rule 10-01(b)(1) of Regulation S-X requires companies to include separate summarized income statement information in their interim financial statements for each equity investee if (i) separate financial statements of the investee would be required for annual periods and (ii) the investee would be required to file Part I of Form 10-Q if the investee were a registrant.
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Practical tip
Practical tip: In evaluating the significance of an equity method investee, the SEC's new interpretive guidance must be considered for all periods presented (No. 2011-01)1/6/11 | Assurance services
Registrants must evaluate the signficance of their equity-method investees to determine whether footnote disclosure under Rule 4-08(g) of Regulation S-X or separate financial statements under Rule 3-09 of Regulation S-X is required for any such investee in the registrant's annual report on Form 10-K. In December 2010, the SEC issued new interpretive guidance for measuring the significance of equity method investees. This new interpretive guidance should be used in measuring the significance of an equity-method investee for all periods presented.
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Practical tip
Practical tip: Discontinued operations reporting for a disposal group should continue to be evaluated until the issuance of the financial statements (No. 2010-11)12/20/10 | Assurance services
Dividends paid on underlying shares related to incentive awards while the award is outstanding or the restricted stock award is unvested may need to be recorded as compensation expense. The accounting depends on whether the award is classified as an equity or liability award and, if classified as an equity award, whether the award is expected to vest. In this Practical Tip, PwC highlights the appropriate accounting treatment.
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Practical tip
Practical tip: Computational guidance when a valuation allowance is required under ASC 740 and there are deferred tax liabilities related to indefinite-lived assets (No. 2010-10)10/7/10 | Assurance services
Accounting Standards Codification, Topic 740, Income Taxes (ASC 740), requires companies to record a valuation allowance for deferred tax assets (DTA) that, based on all available evidence, are not expected to be realized based on ACS 740's more-likely-than-not test. When determining the appropriate valuation allowance, companies should be mindful of what is commonly referred to as the "naked credit" -- a situation in which deferred tax liabilities related to indefinite-lived assets cannot be used as a source of taxable income to support the realization of deferred tax assets. This PwC Practical tip describes the "naked credit" effect and provides examples to assist you.
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Practical tip
Practical tip: Public Companies Should Evaluate Whether the Securities of Any Affiliates Constitute a Substantial Portion of the Collateral for Registered Securities at the End of Each Fiscal Year to Determine Whether Separate Financial Statements of Affiliates Need to Be Filed (No. 2010-09)9/9/10 | Assurance services
Certain filings are required to include separate financial statements for each of a registrant's affiliates (e.g., consolidated subsidiaries) whose securities constitute a substantial portion of the collateral for any class of securities registered or being registered. The "substantial portion" test should be performed in connection with the initial registration of the securities and must be reperformed on an annual basis as long as the securities remain registered and the collateral arrangement is in place. This Practical Tip discusses the requirement and provides an example of the analysis needed.
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Practical tip
Practical tip: Stand-Alone Financial Statements of Subsidiaries Whose Securities Serve as Collateral for Debt That Is Registered or Being Registered May Be Required in Registration Statements and Form 10-K (No. 2010-08)7/26/10 | Assurance services
This PwC Practical Tip serves as a reminder that Rule 3-16 of Regulation S-X requires certain filings to contain separate financial statements for each of a registrant's affiliates (e.g., consolidated subsidiaries) whose securities serve as a substantial portion of the collateral for any class of securities registered or being registered. These requirements are applicable to registration statements and Form 10-K but not Form 10-Q.
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Practical tip
Practical tip: Accounting for Employee Termination Benefits - What Model Should Be Used? (No. 2010-07)6/15/10 | Assurance services
This Practical Tip provides some key considerations for determining which accounting model should be used to account for employee termination benefits. The different models are contractual termination benefits, special termination benefits, one-time employee termination benefits, or other postemployment benefits.