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SEC issues final rule for investment advisers

Aug 25, 2016

The SEC has issued a final rule, “Form ADV and Investment Advisers Act Rules,” to improve the reporting and disclosure requirements for investment advisers.

Specifically, the final rule amends:

  • Form ADV to (1) require investment advisers to disclose additional information (e.g., about their “separately managed account business”), (2) include an approach under which “private fund adviser entities operating a single advisory business” can use a single Form ADV to register, and (3) make certain technical corrections to “Form ADV items and instructions.”
  • The Investment Advisers Act to (1) require advisers to maintain records of performance-related calculations and communications and (2) “remove transition provisions that are no longer necessary.”

The rule is effective 60 days after the date of its publication in the Federal Register, and advisers will need to begin complying with the amendments on October 1, 2017. For more information, see the press release and final rule on the SEC’s Web site.

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GASB (blue) Image

FAF completes post-implementation review of GASB’s guidance on pollution remediation 

Aug 24, 2016

The FAF has released a post-implementation review (PIR) report on GASB Statement No. 49, “Accounting and Financial Reporting for Pollution Remediation Obligations.”

The PIR report concluded that Statement 49 has achieved its objectives. Specific findings noted by the PIR team included the following:

  • Creditors and other financial statement users have received helpful information about pollution remediation liabilities.
  • The standard is generally comprehensible and “can be applied as intended.”
  • The standard has “achieved its expected benefits” without resulting in significant “implementation and ongoing application costs.”

For more information, see the press release and PIR report on the FAF’s Web site as well as the GASB’s response letter to the FAF on the GASB’s Web site.

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FASB issues new standard on not-for-profit financial statements

Aug 19, 2016

The FASB has issued Accounting Standards Update (ASU) No. 2016-14, “Presentation of Financial Statements of Not-for-Profit Entities,” which simplifies how a not-for-profit organization (1) classifies net assets and (2) presents information in financial statements.

The purpose of the ASU is to improve “presentation and disclosures to help not-for-profits provide more relevant information about their resources (and the changes in those resources) to donors, grantors, creditors, and other users.” According to the FASB in Focus newsletter on the ASU, the new standard addresses:

  • “Complexity and understandability of net asset classifications.”
  • “Deficiencies in information about liquidity and availability of resources.”
  • “Lack of consistency in the type of information provided about expenses and investment return.”
  • “Misunderstandings about and opportunities to enhance the utility of the statement of cash flows.”

The ASU is effective for annual reporting periods beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018.

For more information, see the press release, FASB in Focus newsletter, ASU, cost-benefit analysis, and video discussion of the new standard on the FASB’s Web site.

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PCAOB issues annual report on interim inspection program for broker-dealers

Aug 18, 2016

The PCAOB has issued an annual report on its interim inspection program for broker-dealers, which addresses audit deficiencies and independence findings the PCAOB discovered in audit firm inspections it conducted during 2015.

The report notes that 2015 was “the first annual cycle in which all audits and related attestation engagements were required to be performed in accordance with PCAOB standards and amended Exchange Act Rule 17a-5 and the first annual cycle in which the new attestation engagements were included in the inspections.”

The deficiencies noted by the PCAOB primarily concerned revenue recognition, fair value accounting estimates, the net capital rule, and the customer protection rule.

For more information, see the press release, fact sheet, and annual report on the PCAOB’s Web site.

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FASB and IASB announce joint webcast on revenue

Aug 15, 2016

The FASB and IASB will host a joint webcast at 11:00 a.m. EDT on September 15, 2016, to discuss implementation of their joint standard, “Revenue From Contracts With Customers” (issued as ASU 2014-09 by the FASB and IFRS 15 by the IASB).

Topics discussed during the webcast will include:

  • An overview of the revenue model.
  • An update on recent implementation activities (e.g., standard setting, the FASB’s revenue recognition transition resource group).
  • Implementation resources.
  • Disclosures.
  • A Q&A session for the audience.

For more information, see the press release and registration page on the FASB’s Web site.

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FASB proposes concept statement on presentation

Aug 11, 2016

The FASB has issued an exposure draft (ED), “Concepts Statement 8 — Conceptual Framework for Financial Reporting, Chapter 7: Presentation.”

The ED “describes proposed concepts related to presenting information about items that have been recognized in a financial statement,” such as how to group items into financial statement line items and subtotals. Com­ments on the ED are due by November 9, 2016.

For more in­for­ma­tion, see the press release, FASB in Focus newsletter, and ED on the FASB’s Web site.

FASB (US Financial Accounting Standards Board) (lt blue) Image

FASB solicits feedback on agenda consultation

Aug 04, 2016

The FASB has issued an invitation to comment, “Agenda Consultation,” to solicit stakeholder feedback on which topics should be added to the FASB’s agenda.

Topics discussed in the invitation to comment include:

  • Intangible assets, including research and development.
  • Pensions and other postretirement benefit plans.
  • Distinguishing liabilities from equity.
  • Reporting performance and cash flows.

Comments are due by October 17, 2016. Public roundtable meetings on the invitation to comment are expected to be held in the fourth quarter of 2016.

For more information, see the press release and invitation to comment on the FASB’s Web site.

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FASB proposes guidance related to not-for-profit entities

Aug 03, 2016

The FASB has issued a proposed ASU, “Clarifying When a Not-for-Profit Entity That Is a General Partner Should Consolidate a For-Profit Limited Partnership or Similar Entity.”

The pro­posed ASU would:

  • “[R]etain the consolidation guidance that was in [ASC] 810-20 for [not-for-profit entities (NFPs)] by including it within [ASC] 958-810.”
  • Add guidance on when an “NFP limited partner should consolidate a for-profit limited partnership.”
  • Add “kick-out rights,” “participating rights,” and “protective rights” to the ASC 958-810 glossary.
  • Clarify the application of fair value elections.

Com­ments on the pro­posed ASU are due by October 3, 2016. For more in­for­ma­tion, see Deloitte's related journal entry as well as the pro­posed ASU on the FASB’s Web site.

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AICPA issues working drafts on telecommunications revenue recognition implementation issues

Aug 03, 2016

The AICPA’s Revenue Recognition Task Force has released for public comment two working drafts on accounting issues associated with the implementation of the new revenue standard within the telecommunications sector.

The telecommunications working drafts provide guidance on portfolio accounting and contract costs. Com­ments on the working drafts are due by October 1, 2016.

For more in­for­ma­tion, see the telecommunications revenue recog­ni­tion task force page on the AICPA’s Web site. 

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CAQ releases highlights of May 2016 meeting between IPTF and SEC staff

Jul 29, 2016

The Center for Audit Quality (CAQ) has released the highlights of the May 17, 2016, joint meeting between the SEC staff and the CAQ’s SEC Regulations Committee and International Practice Task Force (IPTF).

Topics dis­cussed at the meeting in­cluded:

  • Mon­i­tor­ing in­fla­tion in certain coun­tries.
  • New NYSE rule related to interim financial information.
  • “Updating annual financial statements for retrospective accounting that is first reflected in a full set of interim financial statements, that are not needed to meet nine-month financial statement timeliness requirements under Item 8.A.5 of Form 20-F.”
  • “More current interim financial statements provided on a local GAAP basis (i.e., other than US GAAP or IFRS-IASB), that is not needed to meet nine-month financial statement timeliness requirements under Item 8.A.5 of Form 20-F.”
  • “More current interim financial information provided on a local GAAP basis (other than IFRS-IASB or US GAAP), for an FPI that files its annual financial statements under IFRS-IASB.”
  • “Period to be covered for changes in internal control over financial reporting in the first 10-K filed by an issuer that was previously an FPI filing annual reports on Form 20-F.”
  • SEC staff matters, including disclosure effectiveness, non-GAAP measures, and XBRL IFRS briefing.

For more in­for­ma­tion, see the meeting high­lights on the CAQ’s Web site.

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