January 2018

AcSB Decision Summary – Cryptocurrencies and cloud-computing arrangements

Jan 18, 2018

At its meeting on January 18, 2018, the Accounting Standards Board (AcSB) received feedback on the discussions at a recent IFRS Discussion Group meeting.

The feedback included the Group’s recommendations to the Board to consider whether the issues related to cryptocurrencies, cloud-computing arrangements, lease incentives and interim period reporting of variable lease payments should be raised to the International Accounting Standards Board (IASB) or the IFRS Interpretations Committee. The Board will consider these issues at a future meeting.

Review the Executive Summary on the AcSB's Web site.

AcSB Response – Accounting Policies and Accounting Estimates (Proposed amendments to IAS 8)

Jan 11, 2018

On January 11, 2018, the Accounting Standards Board (AcSB) submitted a comment letter responding to the IASB’s Exposure Draft  issued in September 2017. The letter agrees with some parts of the proposals, but expresses concerns with the way the relationship between accounting estimates and accounting policies is described.

The AcSB suggests broadening the definition of accounting estimates, and defining that term independently from accounting policies to reduce unintended circularity. To improve application in practice, the AcSB strongly encourages the IASB to develop illustrative examples that cover a spectrum of complex situations.

Read the AcSB letter posted by the IASB.

AcSOC Updates Terms of Reference

Jan 10, 2017

On January 10, 2018, the Accounting Standards Oversight Council (AcSOC) released its revised Terms of Reference, which were updated following a joint review of the activities of AcSOC and AASOC.

The Terms of Reference of both Councils are now more closely aligned and reflect current oversight procedures.

Review the Terms of Reference on the AcSOC's website.

AICPA issues revenue working draft for broker-dealers

Jan 08, 2018

On January 8, 2018, the AICPA’s Revenue Recognition Task Force released for public comment a working draft on accounting issues associated with the implementation of the new revenue standard for broker-dealers.

The working draft addresses selling and distribution fee revenue. Comments on the working draft are due by March 1, 2018.

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

The working draft addresses selling and distribution fee revenue.

Comments on the working draft are due by March 1, 2018. For more information, see the revenue recognition resource page on the AICPA’s Web site.

FASB Proposes Improvements to Income Tax Accounting related to the Tax Cuts and Jobs Act

Jan 18, 2018

On January 18, 2018, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) intended to help organizations reclassify certain stranded income tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017. Stakeholders are encouraged to review and provide comments on the proposed improvements by February 2, 2018.

The proposed ASU requires financial statement preparers to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (or portion thereof) is recorded. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate.

In the period of the reclassification, organizations would make the following transition disclosures:

  • The nature and reason for the change in accounting principle
  • A description of the prior-period information that has been retrospectively adjusted, and
  • The effect of the change on affected financial statement line items.

The proposed amendments would be effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption would be permitted.

Review the press release and proposed ASU on the FASB's website.

FASB Simplifies Adoption of New Leases Standard for Some Land Easements

Jan 25, 2018

On January 25, 2018, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that clarifies the application of the new leases guidance to land easements and eases adoption efforts for some land easements.

“The new ASU reduces the cost of adopting the new leases standard for certain land easements,” noted FASB Chairman Russell G. Golden. “Additionally, it helps ensure that companies can make a successful transition to the standard without compromising the quality of information provided to investors about these transactions.”

Land easements (also commonly referred to as rights of way) represent the right to use, access, or cross another entity’s land for a specified purpose.  Land easements are used by utility and telecommunications companies, for example, when they need to take a small strip of land—or easement—to bury wires. Not all companies have historically accounted for them as leases.

The land easements ASU:

  • Provides an optional transition practical expedient that, if elected, would not require an organization to reconsider their accounting for existing land easements that are not currently accounted for under the old leases standard
  • Clarifies that new or modified land easements should be evaluated under the new leases standard, once an entity has adopted the new standard.  

The amendments in this Update affect the amendments in ASU No. 2016-02, Leases (Topic 842), which are not yet effective, but may be early adopted, and Example 10 of Subtopic 350-30. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Update 2016-02. An entity that early adopted Topic 842 should apply the amendments in this Update upon issuance.

Review the press release and the ASU on the FASB's website.

Final report by the EU High-Level Expert Group on Sustainable Finance

Jan 31, 2018

In January 2018, the High-Level Expert Group (HLEG) on Sustainable Finance, established by the European Commission, published its final report setting out strategic recommendations for a financial system that supports sustainable investments.

The HLEG calls on the European Commission (EC) to “place greater emphasis on the need to integrate non-financial information” in the EU Directive on non-financial reporting. The final report states, “The ultimate ambition has to be convergence or integration of financial and non-financial or sustainability information… Integrated reporting supports this convergence qualitatively through reporting that links sustainability factors with company strategy.”

Review the final report and supporting materials on the EC's website.

Four Reasons Why Stock Options Deserve Another Look

Jan 31, 2018

In January 2018, Semler Brossy, an independent executive compensation consulting firm, released an article on how over the past 20 years, stock options have gone from being far and away the most popular equity vehicle to being viewed unfavorably by many.

There are four good reasons why options deserve another look, especially in times when many believe: (i) companies should be investing for the longer term, (ii) companies should be encouraging more innovation with longer payback periods, and (iii) economic growth is increasing.

Review the full article on Semler Brossy's website.

IASB posts webcast on IFRS 17

Jan 18, 2018

On January 18, 2018, the International Accounting Standards Board (IASB) posted a webcast on the level of aggregation requirements in IFRS 17, "Insurance Contracts".

The webcast is presented in two parts:

  • Part 1 explaining why and how insurance contracts are grouped.
  • Part 2 discusses recognition, derecognition and disclosures.

Review the press release on the IASB’s website. In addition, earlier webcasts and webinars on IFRS 17 are available through an archive.

IASB publishes a summary of IFRS 17

Jan 17, 2018

On January 17, 2018, the International Accounting Standards Board (IASB) published a one-page summary of the accounting model in IFRS 17, Insurance Contracts.

The summary is being published as part of the IASB's initiative to help constituents understand the requirements of IFRS 17. The summary explains different elements of the accounting model and how they will be displayed in certain financial statements.

For more information, see the IASB's website for the following:


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