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News

SEC document Image

SEC issues guidance to establish recordkeeping and reporting requirements under Title VII of the Dodd-Frank Act

Sep 19, 2019

The SEC has issued a final rule, “Recordkeeping and Reporting Requirements for Security-Based Swap Dealers, Major Security-Based Swap Participants, and Broker-Dealers,” which includes new rules and rule amendments mandated by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The final rule requires security-based swap dealers, major security-based swap participants, and broker-dealers to “create and retain fundamental business records to document and track their operations, facilitating the Commission's ability to monitor compliance and reducing risk to the market.” Seven key topics are addressed:

  • Record-making requirements.
  • Record preservation requirements.
  • Periodic reporting and annual audit requirements.
  • Early warning notification.
  • Security counts.
  • Alternative compliance mechanisms.
  • Cross-border application.

The final rule will become effective 60 days after the date of its publication in the Federal Register. For more information, see the press release on the SEC’s Web site.

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Highlights of the FASB’s September 18 meeting

Sep 19, 2019

At its September 18, 2019, meeting, the FASB discussed (1) agenda prioritization, (2) proposed improvements to its guidance on credit losses, and (3) interim reporting disclosure requirements.

Agenda prioritization

The Board made decisions about the following projects:

  • Accounting for modifications of equity-classified warrants — The Board decided to add this project to the EITF’s agenda.
  • Accounting by a joint venture for contributions of nonmonetary assets by the venturers — The Board decided to add this project to its technical agenda.
  • Acquired financial assets in a business combination that do not meet the definition of purchased financial assets with credit deterioration — The Board decided not to add this project to its agenda.
  • Recognition and measurement of interest income — The Board decided not to add this project to its agenda.

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

Proposed improvements to guidance on credit losses

The Board discussed feedback received on its June 2019 proposed ASU Codification Improvements to Topic 326, Financial Instruments — Credit Losses. The Board affirmed several decisions related to the project and directed its staff to draft a final ASU for a vote by written ballot.

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

Interim reporting disclosure requirements

The Board decided to incorporate a “high-level principle” related to interim disclosures into ASC 270, Interim Reporting. This principle is based on a passage that has been removed from SEC Regulation S-X, Rule 10-01, Interim Financial Statements. The Board directed its staff to reassess the interim reporting disclosure requirements by performing research and outreach.

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

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PCC holds September 2019 meeting

Sep 19, 2019

The Private Company Council (PCC) held a meeting with the FASB on September 11, 2019.

Topics discussed at the meeting included:

  • A potential practical expedient related to measuring the grant-date fair value of equity-classified share-based payment awards.
  • Implementation issues associated with private companies’ adoption of the FASB’s new leasing standard, ASU 2016-02.
  • Identifiable intangible assets and the subsequent accounting for goodwill.
  • Simplifying the balance sheet classification of debt.
  • Distinguishing liabilities from equity (including convertible debt).
  • Reference rate reform: facilitation of the effects of the interbank offered rate transition on financial reporting.
  • The FASB’s new effective-date philosophy.

The next PCC meeting is scheduled for December 16–17, 2019. For more information, see the meeting recap on the FASB’s Web site.

SEC (US Securities and Exchange Commission) Image

SEC proposes rule to update statistical disclosure requirements for banking registrants

Sep 18, 2019

The SEC has issued a proposed rule, “Update of Statistical Disclosures for Bank and Savings and Loan Registrants.”

The proposed rule would supersede Industry Guide 3, Statistical Disclosure by Bank Holding Companies (which does not contain SEC rules), to which banking registrants are currently subject. Specifically, the proposal would codify certain disclosure requirements from Guide 3 and move “the codified disclosures to a new subpart of Regulation S-K.” The proposal’s scope would include bank holding companies and other registrants that currently provide disclosures under Guide 3 (e.g., banks, savings and loan associations, savings and loan holding companies). The press release on the proposed rule states that registrants within the proposal’s scope would be required to disclose the following:

  • Distribution of assets, liabilities and stockholders’ equity, the related interest income and expense, and interest rates and interest differential;
  • Weighted average yield of investments in debt securities by maturity;
  • Maturity analysis of the loan portfolio including the amounts that have predetermined interest rates and floating or adjustable interest rates;
  • An allocation of the allowance for credit losses and certain credit ratios; and
  • Information about bank deposits including amounts that are uninsured.

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

AICPA (American Institute of CPAs) Image

AICPA issues practice aid on audit considerations related to credit losses

Sep 13, 2019

The AICPA has issued a practice aid, “Allowance for Credit Losses — Audit Considerations.”

The practice aid addresses “key considerations in auditing the allowance for credit losses (ACL) related to loans under [ASC] 326-20 and disclosure considerations.” Specific topics covered include “obtaining an understanding of the entity, assessing the risks, identifying the controls relevant to the audit, designing an audit response, performing audit procedures, and evaluating the audit results.”

FASB document Image

FASB revises proposal on simplifying the balance sheet classification of debt

Sep 12, 2019

The FASB has issued a revised version of its proposed Accounting Standards Update (ASU) “Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent).”

The proposed ASU “would introduce a principle for determining whether debt or other instruments within the scope of the proposed amendments would be classified as a noncurrent liability as of the balance sheet date.” The proposal is part of the FASB’s simplification initiative (i.e., the Board’s effort to reduce the cost and complexity of certain aspects of GAAP for financial statement users).

The proposed ASU is a revised version of the FASB’s January 2017 exposure draft (ED). The press release on the proposal notes the following regarding the changes the FASB made to the guidance in the original ED:

Much of the guidance in this revised proposal is similar to the original 2017 proposal on which the Board has received extensive feedback. Based on input received from stakeholders — including the Private Company Council — the Board added proposed requirements related to unused long-term financing arrangements, such as a line of credit, and grace periods. The revised proposal reflects and seeks comments on these changes, as well as the expected costs and expected benefits of the proposed amendments. [Emphasis added]

Comments on the proposed ASU are due by October 28, 2019.

On September 16, 2019, the FASB issued for comment Proposed Accounting Standards Update (Revised)—Debt (Topic 470): Simplifying the Classification of Debt in a Classified Balance Sheet (Current versus Noncurrent) (Revision of Exposure Draft Issued January 10, 2017. Comments on the proposed taxonomy improvements are due by October 28, 2019.
SEC document Image

SEC proposes amendments to the CAT NMS plan

Sep 11, 2019

The SEC has issued a proposed rule, “Proposed Amendments to the National Market System Plan Governing the Consolidated Audit Trail,” known as the “CAT NMS Plan.”

The proposed rule would “impose public transparency requirements on the self-regulatory organizations that are participants to the CAT NMS Plan.” Specifically, participants “would be required to file with the Commission and publish a complete implementation plan for the [CAT] and quarterly progress reports, each of which must be approved by a supermajority vote of the Operating Committee of CAT NMS, LLC.”

Comments on the proposed rule are due 45 days after the date of its publication in the Federal Register. For more information, see the press release on the SEC’s Web site.

FASB (US Financial Accounting Standards Board) Image

FASB staff proposes improvements to SEC Reporting Taxonomy

Sep 09, 2019

The FASB staff has proposed technical and other conforming improvements to the 2020 SEC Reporting Taxonomy.

The proposal would modify standard and documentation labels and would introduce eight “new elements that were proposed based on a topical review for accounting changes and error corrections for which the underlying recognition and measurement are not specified by GAAP but are used by GAAP filers.”

Com­ments on the pro­posed SEC tax­on­omy im­prove­ments are due by November 8, 2019. For more in­for­ma­tion, see the release notes on the FASB’s Web site.

SEC (US Securities and Exchange Commission) Image

SEC posts drafts of EDGAR Filer Manual for upcoming EDGAR release

Sep 09, 2019

The SEC has issued drafts of Volume I, II, and certain technical specifications related to its Electronic Data Gathering, Analysis, and Retrieval System (EDGAR) Filer Manual for upcoming EDGAR Release 19.3.

The new release is sched­uled for im­ple­men­ta­tion on September 30, 2019. The drafts have not been ap­proved by the Com­mis­sion and are subject to change. The final version of the EDGAR Filer Manual will be posted on the SEC’s Web site once it has been ap­proved.

For more in­for­ma­tion, see the fol­low­ing on the SEC’s Web site:

FASB document Image

FASB proposes guidance related to effects of reference rate reform

Sep 05, 2019

The FASB has issued a proposed Accounting Standards Update (ASU), “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.”

The proposed ASU would provide temporary, optional expedients and exceptions related to applying U.S. GAAP to contract modifications, hedging relationships, fair value hedges, and other transactions affected by reference rate reform. The purpose of the proposal is to “ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting.” However, the proposed amendments would “apply only to contracts or hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.”

Comments on the proposed ASU are due by October 7, 2019. For more information, see the press release and FASB in Focus newsletter on the FASB’s Web site.

On September 16, 2019, the FASB issued for comment Proposed Taxonomy Improvements for Proposed Accounting Standards Update—Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. Comments on the proposed taxonomy improvements are due by October 7, 2019.

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