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News

SEC (US Securities and Exchange Commission) (dark gray) Image

SEC staff publishes C&DIs on brokerage windows

Sep 26, 2016

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretations (C&DIs) related to Securities Act sections and Securities Act forms to include guidance on self-directed “brokerage windows.”

For more information, see Question 139.33 of the Securities Act section C&DIs and Question 126.41 of the Securities Act form C&DIs on the SEC’s Web site.

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GASB issues exposure draft of omnibus statement

Sep 26, 2016

The GASB has issued an exposure draft (ED), “Omnibus 201X.”

The ED’s purpose is “to address a variety of “practice issues that have been identified during implementation and application of certain GASB Statements.” Topics covered in the ED include “issues related to component unit presentation, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits . . .).”

Comments on the ED are due by November 23, 2016. For more information, see the press release and ED on the GASB’s Web site.

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FASB restructures Small Business Advisory Committee

Sep 22, 2016

The FASB has announced the restructuring of its Small Business Advisory Committee (SBAC) and the appointment of 16 members to the committee.

The restructured SBAC “is intended to serve as a standing resource for the FASB in obtaining input from smaller public companies on existing guidance, current and proposed technical agenda projects, and longer-term issues affecting those organizations.”

FASB Chairman Russell Golden explained why the SBAC was restructured:

With the Private Company Council (PCC) increasing its focus on providing the FASB with private company perspectives on the FASB’s active agenda projects, we decided to take another look at the SBAC’s purpose to eliminate the duplication of the PCC’s efforts. Consequently, the FASB concluded that SBAC should shift its focus to the needs of small public companies, thereby further expanding our ability to serve all of our stakeholders by providing this unique group a dedicated voice in the process.

For more information, including the list of SBAC members, see the press release on the FASB’s Web site.

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FASB issues proposed ASU related to amortization on callable debt securities

Sep 22, 2016

The FASB has issued a proposed Accounting Standards Update (ASU), “Premium Amortization on Purchased Callable Debt Securities.”

The proposed ASU “would shorten the amortization period for callable debt securities purchased at a premium.” Specifically, the proposal “would require the premium to be amortized to the earliest call date.” However, for securities purchased at a discount, accounting changes would not be required; rather, “the discount would continue to be amortized to maturity.”

Comments on the proposed ASU are due by November 28, 2016. For more information, see the proposed ASU on the FASB’s Web site.

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FASB discusses inventory disclosures at September 19 meeting

Sep 22, 2016

At its September 19, 2016, meeting, the FASB discussed inventory disclosures as part of its disclosure framework project.

The Board tentatively decided that all entities would be required to provide the following disclosures in their annual financial statements:

  • “Inventory disaggregated by component.”
  • “Inventory disaggregated by measurement basis.”
  • “Changes to the inventory balance that are not specifically related to the purchase, manufacture, or sale of inventory in the ordinary course of business.”
  • “A qualitative description of the costs capitalized into inventory.”
  • “The effect of last-in, first-out (LIFO) liquidations on income.”
  • “The replacement cost for LIFO inventory.”

Further, public business entities would be required to disclose, “in annual and interim periods, inventory by reportable segment or by component for each reportable segment if that information is regularly provided to the chief operating decision maker.”

The Board also tentatively decided to make various amendments to the inventory guidance in ASC 330.

The Board directed its staff to begin drafting a proposed ASU for a vote by written ballot. For more information, see the tentative board decisions on the FASB’s Web site.

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SEC updates EDGAR filer manual and technical specifications

Sep 20, 2016

The SEC has implemented Release 16.3 of its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system filer manual. The release updates volume II of EDGAR and the EDGAR ABS XML technical specification.

Updates include the following:

  • New submission form types.
  • Updated asset data schemas.
  • Minor, documentation-only corrections.
  • Software updates to address previous EDGAR updates.

For more information, see the announcement and EDGAR page on the SEC’s Web site.

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FASB proposes additional technical corrections and improvements to its new revenue standard

Sep 19, 2016

The FASB has issued a proposed Accounting Standards Update (ASU), “Technical Corrections and Improvements to Update 2014-09, ‘Revenue From Contracts With Customers' (Topic 606) — Additional Corrections.”

The proposal, which constitutes the second set of revenue-related technical corrections (i.e., minor changes) the FASB has exposed for comment this year, would affect the following aspects of the new revenue standard:

  • Loan guarantee fees.
  • Contract assets versus receivables.
  • Refund liabilities.
  • Advertising costs.

Comments on the proposed ASU are due by October 4, 2016. For more information, see Deloitte's related journal entry as well as the proposed ASU on the FASB’s website.

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IASB amends insurance contracts standard

Sep 12, 2016

The IASB has published "Applying IFRS 9 'Financial Instruments' With IFRS 4 'Insurance Contracts.'" The standard addresses concerns about the different effective dates of IFRS 9 and the forthcoming new insurance contracts standard, which is expected to be issued as IFRS 17 within the next six months.

The amendments address concerns about the different effective dates of IFRS 9 and the IASB’s forthcoming insurance contracts standard, which is expected to be issued as IFRS 17 within the next six months. Under the amendments, an entity that issues insurance contracts within the scope of IFRS 4 has two options:
  • Overlay approach — Permits entities to reclassify — from profit or loss to other comprehensive income — some of the income or expenses arising from designated financial assets. An entity would apply the overlay approach retrospectively to qualifying financial assets when it first applies IFRS 9.
  • Deferral approach — Temporary exemption from applying IFRS 9 for entities whose predominant activity is issuing contracts within the scope of IFRS 4. An entity would apply the deferral approach for annual periods beginning on or after January 1, 2018. 

In addition, an entity is permitted to stop applying either approach before applying the new insurance contracts standard.

For more information, see Deloitte's IFRS in Focus newsletter as well as the press release on the IASB's Web site and the standard on the IASB's eIFRS Web site (subscription required).
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FASB proposes changes to hedge accounting

Sep 08, 2016

The FASB has issued a proposed ASU, “Targeted Improvements to Accounting for Hedging Activities.”

The proposed ASU would improve “how the economic results of an institution’s risk management activities are portrayed.” Specifically, the proposal:

  • Expands “the use of component hedging for both nonfinancial and financial risks.”
  • Refines “the measurement techniques for hedged items in fair value hedges of benchmark interest rate risk.”
  • Eliminates “the separate measurement and reporting of hedge ineffectiveness.”
  • Requires, “for cash flow and net investment hedges[,] that all changes in fair value of the hedging instrument included in the hedging relationship be deferred in other comprehensive income and released to the income statement in the period(s) when the hedged item affects earnings.”
  • Requires that “changes in the fair value of hedging instruments be recorded in the same income statement line item as the earnings effect of the hedged item.”
  • Requires “enhanced disclosures to highlight the effect of hedge accounting on individual income statement line items.”

In addition, the proposal would simplify the application of hedge accounting by:

  • “Providing more time for the completion of initial quantitative assessments of hedge effectiveness.”
  • “Allowing subsequent assessments of hedge effectiveness to be performed on a qualitative basis when an initial quantitative test is required.”
  • “Clarifying the application of the critical terms match method for a group of forecasted transactions.”
  • “Allowing an institution that elects the shortcut method to continue hedge accounting by using a “long-haul” method to assess hedge effectiveness if use of the shortcut method was not or no longer is appropriate after hedge inception.”

Comments on the proposed ASU are due by November 22, 2016; however, for those who are interested in participating in public roundtable discussions on the proposal, the FASB has asked for comments by November 4, 2016. For more in­for­ma­tion, see Deloitte's Heads Up newsletter as well as the press release, FASB in Focus, and pro­posed ASU on the FASB’s Web site.

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SEC staff publishes C&DI on certain funding agreements

Sep 06, 2016

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretations (C&DIs) related to Regulation AB.

The purpose of the update is to clarify whether a funding-agreement-backed note with certain characteristics should be considered an “asset-backed security,” as that term is defined in either Item 1101(c) of Regulation AB or Section 3(a)(79) of the Securities Exchange Act of 1934.

For more in­for­ma­tion, see Question 301.03, Item 1101(c), of the C&DIs on the SEC’s Web site.

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