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SEC proposes two new rules

Apr 30, 2015

Yesterday, the SEC issued two proposed rules on (1) pay-versus-performance disclosures and (2) cross-border security-based swap transactions related to activity in the United States.

The proposed rule on pay-versus-performance would require companies — except foreign private issuers, registered investment companies, and emerging growth companies — to disclose “in a clear manner the relationship between executive compensation actually paid and the financial performance of the registrant” in proxy or information statements in which executive compensation disclosures are required. Comments on this proposal are due by July 6, 2015.

The proposed rule on cross-border security-based swap transactions would, as noted in the SEC’s press release, “require a non-U.S. company that uses U.S. personnel to arrange, negotiate, or execute a transaction in connection with its dealing activity to include that transaction in determining whether it is required to register as a security-based swap dealer.” Comments on this proposal are due by July 13, 2015.

For more information on these proposed rules, see Deloitte’s related journal entry.

FASB proposes ASU to defer the effective date of the new revenue standard

Apr 29, 2015

The FASB has issued a proposed ASU, “Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date,” which would defer for one year the effective date of the new revenue standard for public and nonpublic entities reporting under U.S. GAAP.

For public business entities, as well as certain nonprofit entities and employee benefit plans, the effective date under the proposal would be annual reporting periods, and interim periods therein, beginning after December 15, 2017. The effective date for all other entities would be one year later than this (i.e., December 15, 2018). Early adoption would be permitted if certain conditions are met (detailed in the proposal).

Comments on the proposed ASU are due by May 29, 2015.

For more information, see Deloitte's related Heads Up newsletter and the press release and proposed ASU on the FASB’s Web site.

FASB publishes new issue of "FASB Outlook"

Apr 29, 2015

The FASB has published the latest issue of its quarterly e-newsletter, "FASB Outlook," which provides high-level information about the Board’s projects and key activities.

This issue features:

  • Chairman Russ Golden’s discussion of the FASB’s major projects and agenda prioritization.
  • An update on the simplification initiative from Vice Chairman James Kroeker.
  • Information about the current expected credit loss model and “vintage” disclosures.
  • Two videos in which (1) FASB board member Larry Smith discusses the proposed ASU on not-for-profit financial statements and (2) FASB project manager Jeffrey Gabello discusses progress being made on the hedge accounting project.
  • A look at upcoming guidance on revenue recognition, employee benefit plans, and not-for-profit financial statements.

 The "FASB Outlook" e-newsletter is available on the FASB’s Web site.

IASB aligns with FASB and tentatively decides to defer effective date of new revenue standard

Apr 28, 2015

The IASB tentatively decided today to defer the effective date of IFRS 15, “Revenue From Contracts With Customers,” to January 1, 2018. This decision aligns IFRS 15’s effective date with that of the FASB’s counterpart standard, ASU 2014-09, which the FASB decided to defer by one year at its April 1, 2015, meeting.

The IASB staff will prepare a stand-alone exposure draft on the deferral. The exposure draft will have a comment period of 30 days and is expected to be issued in May 2015.

For more information, see Deloitte's IFRS in Focus newsletter as well as the press release on the IASB's Web site.

GASB updates its technical agenda

Apr 27, 2015

At its board meeting last week, the GASB discussed updating its technical plan. Agenda decisions the Board made at the meeting are summarized below.

The GASB voted to add projects on:

  • Going concern — According to its press release, the Board will research “whether existing GAAP standards provide state and local government financial statement preparers with sufficient guidance about management’s responsibilities for evaluating and disclosing uncertainties associated with severe financial stress.”
  • Debt disclosure guidance — The Board will research “whether notes to the financial statements currently provide sufficient debt information to financial statement users for decision making and assessments of accountability.”

The GASB also decided to remove its project on economic condition reporting from its technical agenda.

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

FASB issues two proposals in response to EITF consensuses-for-exposure

Apr 24, 2015

The FASB has issued two proposed ASUs in response to the EITF consensuses-for-exposure on Issues 15A, 15C-I, 15C-II, and 15C-III. One of the proposals provides guidance on certain electricity contracts within nodal energy markets, and the other would simplify the accounting and disclosure requirements for employee benefit plans.

Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts Within Nodal Energy Markets

This proposal specifies that a forward purchase or sale of electricity in which electricity must be physically delivered through a nodal energy market operated by an independent system operator, and in which an entity incurs transmission costs on the basis of locational marginal pricing charges, would meet the physical-delivery requirement under the normal purchases and normal sales scope exception.

Employee Benefit Plan Simplifications

The provisions of this proposal, which is divided into three sub-proposals, include the following:

  • Fully benefit-responsive investment contracts would be measured at contract value and the requirement to reconcile contract value to fair value (if different) would be removed.
  • Plan assets would be disclosed by general type in a manner consistent with current plan accounting and would not need to be disaggregated in accordance with ASC 820. Participant self-directed brokerage accounts would be disclosed as one general type. Further, plan assets would be disclosed by general type on either the face of the financial statements or in the footnotes.
  • Entities would be required to provide ASC 820 disclosures on the basis of the general type of plan assets. However, entities that file Form 5500 as direct filing entities would not be required to disclose the investment strategies for investments measured at net asset value. Plan assets that account for 5 percent or more of net assets would not be listed individually.
  • The requirement to provide plan asset disclosures about net appreciation or depreciation would be removed. However, entities would be required to provide the ASC 820 rollforward disclosure about realized and unrealized gains and losses as well as sales, purchases, and transfers of Level 3 investments during the reporting period.
  • An employee benefit plan could use an alternative measurement date consisting of the closest month-end date to its fiscal year-end. However, contributions, distributions, and other significant events between the alternative measurement date and the fiscal year-end would be disclosed rather than adjusted for within the financial statements.

Comments on both proposed ASUs are due by May 18, 2015. For more in­for­ma­tion, see Deloitte’s March 2015 EITF Snapshot as well as proposed ASUs EITF 15-A and EITF 15-C on the FASB’s Web site.

Highlights from the FASB’s April 22 meeting

Apr 23, 2015

At its April 22, 2015, meeting, the FASB discussed its projects on (1) the entity’s decision process phase of its disclosure framework project, (2) impairment, and (3) hedging.

  • Disclosure framework: entity’s decision process — After discussing the results of its outreach to auditors, the FASB made several decisions related to its March 2014 exposure draft and directed its staff to seek external review feedback on the draft of the proposed ASU. For more information, see Deloitte’s related journal entry.
  • Financial instruments: impairment — The FASB tentatively decided to revise the definition of a purchased credit-impaired asset. For more information, see Deloitte’s related journal entry.
  • Financial instruments: hedging — The FASB held an educational session to discuss four issues. No decisions were made.

For more information about the topics discussed at the meeting, see the tentative Board decisions on the FASB’s Web site.

FASB proposes ASU to improve not-for-profit financial statements

Apr 23, 2015

The FASB has issued a proposed ASU, “Presentation of Financial Statements of Not-for-Profit Entities,” which would change “the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows.”

The proposed ASU addresses (1) the complexity and understandability of net asset classifications, (2) inconsistent reporting of intermediate measures of operations in the statement of activities, (3) lack of consistency in the type of information provided about expenses for a period, and (4) inconsistencies in the reporting of operating information in the statement of activities and operating cash flows statement of cash flows.

Comments on the proposed ASU are due by August 20, 2015. For more information, see Deloitte's related Heads Up newsletter as well as the press release, proposed ASU, FASB in Focus newsletter, FAQ document, and webinar on the FASB’s Web site.

IASB to discuss effective date of IFRS 15

Apr 20, 2015

The IASB has published an agenda paper for its April meeting, which discusses the effective date of IFRS 15, “Revenue From Contracts With Customers” (converged with the FASB’s ASU 2014-09 by the same name).

Prepared by the IASB staff, the agenda paper asks the IASB whether it wishes to defer the effective date in light of (1) issues emerging from dis­cus­sions of the revenue tran­si­tion resource group (TRG) and (2) the FASB’s tentative decision to defer the effective date of ASU 2014-09 for one year for both public and nonpublic entities. The paper makes the following rec­om­men­da­tions:

We recommend that the IASB defer the effective date of IFRS 15 by one year to 1 January 2018. An entity would continue to be permitted to apply the requirements to annual periods beginning before that date.

If the IASB agrees to propose a deferral of the effective date, we recommend publishing the proposed deferral for comment as a separate narrow-scope Exposure Draft. That Exposure Draft would include a comment period of no less than 30 days that allows for the finalisation of the IASB’s discussions in this respect at the July 2015 board meeting.

For more information, see the agenda paper on the IASB's Web site. Also see Deloitte’s May 28, 2014, and April 1, 2015, Heads Up newsletters for more information about the revenue standard and the FASB's effective date deferral.

PCAOB and APOA enter into cooperative agreement

Apr 16, 2015

The PCAOB and the Auditors' Public Oversight Authority of the Ministry for the National Economy of Hungary (APOA) have entered into a cooperative agreement regarding the oversight of audit firms subject to the regulatory jurisdictions of both regulators.

The agreement, which is effective immediately, allows the exchange of confidential information of firms operating in both jurisdictions and is intended to enhance the regulators’ supervisory oversight, inspections, and investigations of the firms.

The two regulators also signed a data protection agreement to ensure that national data protection requirements are performed during any transfer of information.

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

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