For the first time since its inception, there will be significant changes to accounting standards for private enterprises (ASPE). Are you affected?
You will be if you’ve got subsidiaries, joint ventures, employee benefit plans such as pensions, discontinued operations, or redeemable preferred shares issued in connection with tax planning arrangements.
Some of the recent changes — on employee future benefits and discontinued operations — are done and dusted and effective in 2014, at least for those with calendar year ends. By contrast, the new standards on subsidiaries, joint arrangements and the proposed changes regarding redeemable preferred shares won’t apply until 2016. That they’re giving you an extended time to apply these is your first hint that these changes aren’t inconsequential. More ominously, perhaps, is that the Board has indicated in at least one case that the purpose is to allow enough time to renegotiate debt covenants. Be warned!
And there you have it: everything you need to know about ASPE for 2014 and beyond. Well, perhaps not quite everything. As we write, the Board is considering making other changes to standards as well. Which means you can look forward to receiving another issue of the Financial Reporting Release in the not too distant future.
If you have any questions, or would like to discuss any of these items, please reach out to one of the contacts listed within the publication, or your PwC engagement team.
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