On January 5, the FASB issued an Accounting Standards Update intended to improve the recognition and measurement of financial instruments. It affects public and private companies, not-for-profit organizations, and employee benefit plans.
The new guidance makes targeted improvements to existing GAAP by requiring:
The guidance is effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. All other entities, including certain not-for-profit entities and employee benefit plans, will have an additional year, or may early adopt coincident with the public business entity effective date.
For more information on the new guidance, read PwC’s In brief.
The Center for Audit Quality recently unveiled a framework for auditing accounting estimates and fair value measurements in a letter to the PCAOB.
The framework was laid out in a December 1 addendum to the CAQ’s prior comment letters submitted in response to the PCAOB’s request for input on staff consultation papers related to auditing accounting estimates, including fair value measurements, and using the work of specialists.
The framework is consistent with overarching principles the CAQ described in previous comment letters, which state that any enhancements to existing auditing standards should: