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News

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

SEC proposes new clawback requirements

Jul 01, 2015

The SEC has issued a proposed rule that would require companies to adopt “clawback” polices on executive compensation.

Specifically, the proposal, which is being released in response to a mandate in Section 954 of the Dodd-Frank Act, “would direct the national securities exchanges and national securities associations to establish listing standards that would require each issuer to develop and implement a policy providing for the recovery, under certain circumstances, of incentive-based compensation based on financial information required to be reported under the securities laws that is received by current or former executive officers, and require the disclosure of the policy.” This proposal marks the completion of the SEC’s issuance of proposed executive compensation rules under the Dodd-Frank Act.

Comments on the proposed rule are due 60 days after the date of its publication in the Federal Register.

For more information, see Deloitte's related journal entry as well as the proposed rule and press release on the SEC’s Web site.

SASB document (green) Image

SASB issues provisional standards for consumption industries

Jul 01, 2015

The SASB has issued provisional standards for the consumption industries. The standards are the eighth set in a planned series of industry-related SASB standards on accounting for environmental, social, and governance issues that could be material to a corporation’s performance. The standards focus on material sustainability matters that corporations are already required to disclose in their Form 10-K or 20-F filings with the SEC.

The stan­dards apply to the fol­low­ing in­dus­tries:

  • Agricultural products.
  • Meat, poultry, and dairy.
  • Processed foods.
  • Nonalcoholic beverages.
  • Alcoholic beverages.
  • Tobacco.
  • Household and personal products.

The Board’s first seven sets of pro­vi­sional stan­dards focus on com­mu­ni­ca­tions,
fi­nan­cials, health care, non­re­new­able re­sources, pro­vi­sional ser­vices, resource transformation, and trans­porta­tion.

The new pro­vi­sional stan­dards and cor­re­spond­ing in­dus­try briefs are avail­able on the SASB’s Web site.

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

SEC proposes revisions to audit committee disclosure requirements

Jul 01, 2015

The SEC has issued a concept release that requests feedback on potential enhancements to the audit committee disclosure requirements.

In particular, the Commission is hoping to learn more about the factors the audit committee considers when overseeing the independent auditor. Regarding the need for an ongoing assessment of these requirements, SEC Chairman Mary Jo White points out that “[t]he way audit committees exercise their oversight of independent auditors has evolved and it is important to evaluate whether investors have the information they need to make informed decisions.”

Comments on the concept release are due 60 days after the date of its publication in the Federal Register.

For more information, see Deloitte's related journal entry as well as the press release and concept release on the SEC’s Web site.

PCAOB (US Public Company Accounting Oversight Board) (dark gray) Image

PCAOB requests comments on alternative for disclosing engagement partner and other audit participants

Jul 01, 2015

The PCAOB has issued a supplemental request for comment that seeks feedback on its “2013 reproposal to require auditors to disclose in the auditor’s report the name of the engagement partner and information about certain other participants in the audit.” Specifically, the PCAOB is seeking feedback on a proposal under which auditors would disclose such information in a new form, known as Form AP, as an alternative to providing such disclosures in the auditor's report. However, auditors would be permitted to “voluntarily provide the same disclosures in the auditor’s report.”

For more in­for­ma­tion, see Deloitte's related journal entry as well as the supplemental request for commentpress release and fact sheet on the PCAOB’s Web site, as well as our previous news item on the pro­posed amend­ments.

FASB meeting (blue) Image

Highlights from the FASB’s June 29 meeting

Jun 30, 2015

At its June 29, 2015, meeting, the FASB discussed its projects on (1) hedging and (2) pensions and other postretirement benefits.

  • Financial instruments: hedging — The FASB held its first decision-making meeting related to this project and discussed three “decision packages” proposed by its staff, which covered aspects of (1) the overall hedging model, (2) financial hedging relationships, and (3) the shortcut method. See Deloitte’s related journal entry for more information.
  • Pensions and other postretirement benefits: presentation and disclosure — The FASB discussed (1) improving the presentation of net periodic pension cost and net periodic postretirement benefit cost and (2) potential changes to the disclosures about defined benefit plans that employers are required to provide in their financial statements when applying the disclosure framework. See Deloitte's related journal entry for more information.

 For more information, see the tentative Board decisions on the FASB’s Web site.

GASB (Governmental Accounting Standards Board) (blue) Image

GASB issues four new Statements

Jun 30, 2015

The GASB has issued three Statements to improve the accounting for pensions and other postemployment benefits (OPEB) and one Statement to simplify the structure of the GAAP hierarchy for state and local governments.

GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not Within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68, generally aligns the reporting requirements for pensions and pension plans not covered in GASB Statements 67 and 68 with the reporting requirements in Statement 68. It is effective for fiscal years beginning after June 15, 2015, with the exception of the “provisions that address employers and governmental nonemployer contributing entities for pensions that are not within the scope of Statement 68, which are effective for financial statements for fiscal years beginning after June 15, 2016.”

GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, addresses “reporting by OPEB plans that administer benefits on behalf of governments.” It is effective for financial statements for fiscal years beginning after June 15, 2016.

GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, provides guidance on “reporting by governments that provide OPEB to their employees and for governments that finance OPEB for employees of other governments.” It is effective for fiscal years beginning after June 15, 2017.

GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, eliminates two of the four categories of authoritative GAAP that exist under the existing hierarchy prescribed by Statement 55. The two categories that will remain under the new standard are (1) GASB Statements and (2) GASB technical bulletins and implementation guides in addition to AICPA guidance that the GASB clears. It is effective for reporting periods beginning after June 15, 2015.

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

FASB issues proposed taxonomy implementation guide on measurement date practical expedient for defined benefit plans

Jun 30, 2015

The FASB has issued a proposed U.S. GAAP financial reporting taxonomy (UGT) implementation guide to “demonstrate the modeling of disclosures related to the practical expedient for the measurement date of an employer’s defined benefit obligation and plan assets.”

The im­ple­men­ta­tion guide con­tains ex­am­ples il­lus­trat­ing two dis­clo­sure sce­nar­ios:

  1. Reconciliation of employer contributions and a settlement after the measurement date but before the fiscal year-end date.
  2. Reconciliation of employer contributions and a settlement before the measurement date but after the fiscal year-end date.

Com­ments on the UGT im­ple­men­ta­tion guide are due by August 28, 2015. The guide is avail­able on the FASB’s Web site.

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

SEC staff issues guidance on amendments to Regulation A

Jun 26, 2015

The SEC staff has guidance (Amendments to Regulation A: A Small Entity Compliance Guide) on its March 2015 amendments to Regulation A. The amendments, which were issued to implement Section 401 of the Jumpstart Our Business Startups Act, exempt certain offerings from registration under the Securities Act of 1933.

Specifically, they provide relief for entities that offer and sell up to $50 million of securities in a 12-month period if they meet specified eligibility, disclosure, and reporting requirements. The amendments were effective on June 19, 2015. The new guidance “summarizes and explains [the] rules adopted by the SEC, but is not a substitute for any rule itself.” For additional information, see the SEC’s Amendments to Regulation A: A Small Entity Compliance Guide.

The SEC staff also recently issued and revised a number of compliance and disclosure interpretations to provide additional guidance on Regulation A. Specifically, the staff added questions 182.01 through 182.11 under the Securities Act Rules interpretations, and withdrew questions 128.01 and 128.03 from the Securities Act Forms interpretations.

FASB (US Financial Accounting Standards Board) (blue) Image
IASB (International Accounting Standards Board) (blue) Image

Highlights from the FASB’s and IASB’s June 22 meeting

Jun 24, 2015

At their June 22, 2015, joint meeting, the FASB and IASB discussed questions that have arisen regarding the implementation of the principal-versus-agent considerations in ASC 606 and IFRS 15, “Revenue From Contracts With Customers.”

The boards made tentative decisions about the following aspects of the principal-versus-agent considerations:

  • Principle for determining whether an entity’s promise is to provide or to arrange — The boards reaffirmed that “an entity’s promise is to provide a specified good or service to a customer . . . when it controls the specified good or service before that good or service is transferred to the customer.”
  • Unit of account for the principal-versus-agent evaluation — The boards tentatively decided to clarify that “a specified good or service is a distinct good or service (or distinct bundle of goods or services).” 
  • Application of the control principle — The boards tentatively decided to clarify how the control principle is applied with respect to services.
  • Control indicators — The boards decided to further explain the role of the control indicators in ASC 606 and IFRS 15.
  • Illustrative examples — The boards decided to amend, and include additional, principal-versus-agent examples in ASC 606 and IFRS 15.

In addition, the FASB directed the staff to further research the estimation of gross revenue as a principal; the Board plans to discuss this topic at a future meeting.

For more in­for­ma­tion, see Deloitte's related journal entry as well as the ten­ta­tive Board de­ci­sions on the FASB’s Web site.

EITF meeting (mid blue) Image

EITF discusses five issues at June meeting

Jun 19, 2015

At its meeting yesterday, the EITF discussed issues related to (1) application of the normal purchases and normal sales scope exception to certain electricity contracts, (2) employee benefit plan simplifications, (3) effect of derivative contract novations on existing hedge accounting relationships, (4) contingent put and call options in debt instruments, and (5) classification of certain cash receipts and cash payments.

For a de­tailed summary of the meeting, see De­loitte’s June 2015 EITF Snap­shot.

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