This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.


PCAOB issues staff guidance for broker-dealers

Jun 30, 2014

The PCAOB has issued staff guidance intended to help auditors of SEC-registered brokers and dealers plan and perform audits in accordance with the (1) significant provisions of SEC Rule 17a-5 and (2) PCAOB standards and rules applicable to audits of broker-dealers.

For more information, see the staff guidance and the press release on the PCAOB’s Web site.

FASB meets to discuss financial statement presentation

Jun 26, 2014

At its June 25, 2014, meeting, the FASB began discussing the objective and scope of its research project on financial statement presentation. The Board agreed to rename the project “Financial Performance Reporting” to avoid confusing it with its previous joint project with the IASB on this same topic.

The Board decided that the primary objective of the research project would be to evaluate ways to improve the relevance of information presented in the performance statement.

For more information, see the meeting minutes on the FASB’s Web site.


SEC adopts cross-border security-based swap rules

Jun 26, 2014

The SEC has issued final rules on cross-border security-based swap activities for market participants. As indicated in the SEC’s press release, the rules, which are the first in a series on cross-border security-based swap activities, “explain when a cross-border transaction must be counted toward the requirement to register as a security-based swap dealer or major security-based swap participant. The rules also address the scope of the SEC’s cross-border anti-fraud authority.”

The rules state that non-U.S. persons are required to register with the SEC as a security-based swap dealer and specify or describe:

  • Transactions included in the dealer calculation.
  • The definition of a U.S. person
  • The definition of a principal place of business.
  • Non-U.S. dealers whose counterparties have rights of recourse against a U.S. person affiliate.
  • Conduit affiliates.
  • Aggregating transactions involving dealing activity of affiliates.
  • Cleared anonymous transactions.
  • Further consideration of activity in the United States involving only non-U.S. persons.

The rules also state that non-U.S. persons are required to register with the SEC as a major security-based swap participant and discuss:

  • Transactions included in the major participant calculations.
  • Attribution of guaranteed positions.
  • The anti-fraud rule.

The final rules is effective on September 8, 2014.

For more information, see Final Rule 34-72472, Application of “Security-Based Swap Dealer” and “Major Security-Based Swap Participant” Definitions to Cross-Border Security-Based Swap Activities, and the press release on the SEC’s Web site. Speeches by the following individuals from yesterday’s open meeting about the final rules are also available on the SEC’s Web site:

SASB issues provisional nonrenewable resources standards

Jun 26, 2014

The SASB has issued provisional standards for the nonrenewable resources sector. The standards are the fourth 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:

  • Oil and gas — exploration and production.
  • Oil and gas — midstream.
  • Oil and gas — refining and marketing.
  • Oil and gas — services.
  • Coal operations.
  • Iron and steel producers.
  • Metals and mining.
  • Construction materials.

The Board’s first three sets of provisional standards focus on health care, financials, and communications.

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

FASB Board member discusses the future of accounting for rate-regulated utilities

Jun 25, 2014

FASB Board member Thomas J. Linsmeier spoke at yesterday’s Accounting Leadership and Chief Audit Executive Conference, presented by the Edison Electric Institute and the American Gas Association in San Francisco. Focusing on rate-regulated entities, he discussed the FASB's efforts to simplify and improve U.S. GAAP.

Mr. Linsmeier explained that the FASB envisions “a new, long-term, decentralized, global standard-setting environment in which the FASB, the IASB, and other major capital market standard setters co-exist and cooperate, as peers, with the goal of issuing more comparable standards, while also addressing the specific needs of the capital markets for which they set standards.”

He noted that the FASB would carry out its mission in this new environment "1) Through the continued development and improvement of GAAP; 2) By actively participating in the development of IFRS; and 3) By enhancing relationships and communications with other national standard setters."

However, he noted that despite the urging by some in the international community to develop a new, converged standard with the IASB, he does not “foresee the FASB making major changes to [its] model.” Mr. Linsmeier stated that while the FASB rate-regulation model is not perfect, “it is not broken” and that it is “very hard to conclude that it would be cost-beneficial to ask our stakeholders to completely overhaul their accounting for rate-regulated activities just to achieve convergence with IFRS.”

The full transcript of his speech is available on the FASB’s Web site.

Gary Bruebaker appointed to the FAF board of trustees

Jun 24, 2014

The Financial Accounting Foundation (FAF) has announced the appointment of Gary H. Bruebaker to the FAF board of trustees to replace retiring trustee John J. Brennan. Mr. Bruebaker’s term will begin on July 1, 2014, and end on December 31, 2018.

Mr. Bruebaker is currently the chief investment officer for the Washington State Investment Board, where he provides financial analysis guidance to the Board and is responsible for the investment and management of the state’s assets. Mr. Bruebaker has also served as the deputy state treasurer for the Oregon State Treasury and has been a member of the Oregon Short-Term Fund Board, the Oregon Municipal Debt Advisory Commission, and the Private Activity Bond Committee.

For more information, see the press release on the FAF’s Web site.

Highlights from the FASB’s June 18 meeting

Jun 23, 2014

At its June 18, 2014, meeting, the FASB discussed its projects related to (1) the conceptual framework, (2) accounting for fees paid in a cloud computing arrangement, and (3) not-for-profit financial statements. In addition, the FASB jointly met with the IASB to discuss the leases project.


Conceptual framework

In establishing priorities for its conceptual framework project, the FASB decided that it would first tackle presentation and measurement and then move on to liability-equity distinction.

For more information, see the meeting minutes on the FASB’s Web site.


Customer’s accounting for fees in a cloud computing arrangement

The FASB tentatively decided to include the guidance in ASC 985-605-55-121 through 55-123 in the scope of ASC 350-40 and that entities would apply that guidance to cloud computing arrangements to determine whether a contract includes a software license or instead is a service contract.

In addition, the Board directed the staff to draft a proposed ASU.

For more information, see the meeting minutes on the FASB’s Web site.


Financial statements of not-for-profit entities

The FASB reaffirmed the tentative decision reached at its May 14, 2014, meeting, to “require external and direct internal investment expenses to be netted against the investment return”; however, it tentatively decided to “remove the disclosure requirement existing in current GAAP about netted investment expenses for all NFP entities.” The Board also made tentative decisions related to improving note disclosures for not-for-profit entities.

For more information, see the meeting minutes on the FASB’s Web site.



The FASB and IASB continued redeliberating their exposure draft on leases and made tentative decisions related to subleases, lessee balance sheet presentation, and cash flow presentation.

For details, see the related Deloitte Accounting Journal entry and the meeting minutes on the FASB’s Web site.

FASB issues guidance on share-based awards with performance targets attainable after the requisite service period

Jun 20, 2014

The FASB has issued ASU 2014-12* in response to the consensus of the Emerging Issues Task Force on EITF Issue 13-D.**

The ASU amends the guidance in ASC 718 and clarifies that entities should treat performance targets that can be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Accordingly, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met.

The ASU’s guidance is effective for reporting periods (including interim periods) beginning after December 15, 2015.

For more information, see the related Deloitte Accounting Journal entry and the ASU on the FASB’s Web site.


* FASB Accounting Standards Update No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). 

** EITF Issue No. 13-D, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.”

GASB issues proposals on OPEB and certain pensions

Jun 19, 2014

The GASB has issued three exposure drafts, two of which are intended to significantly improve financial reporting by state and local governments related to other postemployment benefits (OPEB). The other proposal would create requirements for certain pensions not covered under the GASB’s new pension standards (Statements 67 and 68).

As described in the GASB’s news release, the three exposure drafts are as follows:

Comments on the proposals are due by August 29, 2014.

For more information, see the news release, OPEB page, and article on the GASB’s Web site.

FAF president discusses FASB and GASB comparability

Jun 18, 2014

The FAF has issued the June/July edition of its column, “From the President’s Desk,” by FAF President and CEO Terri Polley. The column raises the question of how the FASB and GASB could improve the comparability of their respective standards, thereby promoting financial statement transparency for both government and private-sector entities.

Specific topics covered in the column include the FASB’s and GASB’s standard-setting jurisdiction, the two organizations’ cooperation on various projects, and aspects of their accounting guidance that fundamentally differ.

 The column is available on the FAF’s Web site.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.