PwC's accounting and reporting news: Week of January 2, 2020

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We begin 2020 knowing that most CFOs and financial professionals will have a near singular focus on 2019 until your financial statements are issued. We’re sharing a collection of content designed to help you navigate this year’s reporting cycle. From our guide on financial statement presentation to insights on what regulators, standard setters, and investors expect to see in your financial reports, we provide you with a collection of tools you may find useful this time of year.

In addition, before settling in for the holidays, the FASB issued its long-awaited guidance on income tax simplification. While it’s brand new and not yet effective, early adoption is permitted. So it may be helpful to adopt these improvements now, as long as you are prepared to adopt them all.

Year-end resources

We have many resources to help you through your year-end, including our Financial statement presentation guide and the Q4 edition of The quarter close. Want to know the latest priorities of the regulators and standard setters? Listen to our podcast What you missed at the 2019 AICPA Conference. Our 2019 year-end financial reporting resources page pulls these and other year-end resources together in one spot.

Income tax simplification

On December 18, the FASB issued new guidance to simplify the accounting for income taxes. Although it’s not required to be adopted until 2021 for calendar year-end public business entities (2022 for other entities) early adoption is permitted for any financial statements not yet issued. Read our In depth, FASB simplifies accounting for income taxes for information on whether companies would benefit from taking advantage of these simplifications now.

SEC comment letter trends

Before you file your financial statements, you should take a look at our interactive SEC comment letter trends tool. In addition to listing the topical areas most frequently subject to SEC comment, it provides our insights on the nature of SEC staff comments, sample text from SEC comments, and links to additional information on the accounting and disclosure requirements addressed in each topical area. 

The top five topical areas most frequently the subject of SEC comment are (1) revenue recognition, (2) non-GAAP measures, (3) fair value measurements, (4) management’s discussion and analysis, and (5) segment reporting.

Non-GAAP measures is consistently among the top focus areas. For points to consider when including non-GAAP measures in your company’s financial statements, read In the loop, Non-GAAP measures and the ongoing dialogue: What you should know and listen to our podcast, Non-GAAP measures: 5 things you need to know.

Investor perspectives on financial reporting

What do investors and analysts really want from your financial statements? Over the past year, they have told us that they are looking for consistent and transparent financial reporting (including disclosures) to allow for better comparison from period to period as well as among peer companies. Our podcast details how to accomplish this; companies should:

  • provide details on risks and uncertainties,

  • ensure non-GAAP measures are in line with SEC guidelines,

  • provide transparent cash flow disclosure and ensure appropriate classification of significant cash and non-cash items (for more information, see In the loop, Cash flows: can stakeholders tell where your money is going?),

  • tell their long-term growth story; go beyond minimum disclosure, and

  • consider enhanced disclosures of environmental, social, and governance matters.

For more on what’s on the minds of investors and analysts, watch our investor perspectives video.

Private company year-end resources

Private companies often face different issues than public companies. Our Private company insights - year-end 2019 highlights the issues private companies may face during their year-end reporting cycle.

Contact us

Heather Horn

US Strategic Thought Leader, National Professional Services Group, PwC US

David Schmid

International Accounting Leader, National Professional Services Group, PwC US