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June

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, (2) pensions and other postretirement benefits, and (3) disclosure framework.

  • 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. For more information, see Deloitte’s related journal entry as well as the meeting minutes on the FASB’s Web site.
  • 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. For more information, see Deloitte's related journal entry as well as the meeting minutes on the FASB's Web site.
  • Disclosure framework: defined benefit plans — The FASB discussed changes to an employer’s defined benefit plan disclosures based on the proposed concepts in the Board’s disclosure framework exposure draft and feedback received through the FASB staff’s outreach to stakeholders. The Board tentatively decided to add an overall objective for the disclosures and guidance on how an entity would consider materiality in determining the extent of its defined benefit plan disclosures. For more information, see Deloitte's related journal entry as well as the meeting minutes on the FASB's Web site.

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 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 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.

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 meeting minutes on the FASB’s Web site.

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.

IASB proposes amendments to pension accounting

Jun 18, 2015

The IASB has published an exposure draft (ED), “Remeasurement on a Plan Amendment, Curtailment or Settlement/Availability of a Refund From a Defined Benefit Plan,” that proposes narrow-scope amendments to the pension accounting requirements in IAS 19, “Employee Benefits,” and IFRIC 14, “IAS 19 — The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction.”

Under the proposed amendments to IAS 19, an entity would be required to use updated information regarding “the assumptions about its obligation and fair value of its plan assets . . . to determine current service cost and net interest for the period followed by these changes.” The proposed revisions to IFRIC 14 would clarify “how the powers of other parties, such as the Trustees of the plan, affect an entity’s right to a refund of a surplus from the plan.”

The overall objectives of the proposed amendments are to enhance the information provided to investors and reduce diversity in practice. Comments on the ED are due by October 19, 2015.

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

SEC updates EDGAR filer manual and technical specifications

Jun 15, 2015

The SEC has implemented Release 15.2 of its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system filer manual. The release updates volume II of EDGAR as well as several XML technical specifications, including those related to EDGARLink online, EDGAR ABS, and EDGAR Regulation A.

Specific updates include:

  • New and updated sub­mis­sion form types.
  • Removal of OMB expiration dates from certain submission forms.
  • Removal of support for US-GAAP-2013 and EXCH-2013 taxonomies.
  • New element types.
  • Schema updates.

For more in­for­ma­tion, see the final rule and the EDGAR page on the SEC’s Web site.

FASB makes technical corrections to the Codification

Jun 15, 2015

The FASB has issued Accounting Standards Update (ASU) No. 2015-10, “Technical Corrections and Improvements,” which makes minor amendments to the FASB Accounting Standards Codification.

The technical corrections are divided into four main categories:

  • Amendments to align Codification wording with that in pre-Codification standards.
  • Corrections to references and clarification of guidance to avoid misapplication and misinterpretation.
  • Minor edits to simplify the Codification and thereby improve its usefulness.
  • Minor enhancements to Codification guidance that are not expected to have a significant effect on current practice.

The amendments to transition guidance are effective for fiscal years beginning after December 15, 2015; all other changes are effective upon issuance of this ASU. For more information, see the ASU on the FASB’s Web site.

GASB issues proposal on irrevocable split-interest agreements

Jun 12, 2015

The GASB has issued an exposure draft, “Accounting and Financial Reporting for Irrevocable Split-Interest Agreements,” that would enhance the comparability of governmental financial statements by providing “recognition and measurement guidance for circumstances in which a government is a beneficiary of the [split-interest] agreement.”

In addition, the proposal would improve the transparency and decision-usefulness of general-purpose external financial reports.

Comments on the proposal are due by September 18, 2015. For more information, see the exposure draft and press release on the GASB’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.