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FASB proposes guidance on restricted cash

Apr 28, 2016

The FASB has issued a proposed ASU, “Restricted Cash,” in response to the EITF consensus-for-exposure on Issue 16-A.

The proposed ASU would require an entity to include in its cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. The proposal’s primary purpose is to eliminate the diversity in practice related to how entities classify and present changes in restricted cash in the cash flow statement in accordance with ASC 230.

Com­ments on the pro­posed ASU are due by June 27, 2016. For more in­for­ma­tion, see Deloitte’s March 2016 EITF Snapshot as well as the pro­posed ASU on the FASB’s Web site.

SEC staff publishes C&DI on Form ABS-EE filing

Apr 28, 2016

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretation (C&DI) related to Regulation AB to include guidance on filing asset-level disclosures on Form ABS-EE.

For more in­for­ma­tion, see the C&DI on the SEC’s Web site.

SEC proposes national market system plan to create a consolidated audit trail

Apr 27, 2016

The SEC has proposed a national market system (NMS) plan under which a consolidated audit trail (CAT) and other related data would be created, implemented, and maintained.

The NMS plan describes how self-regulatory organizations and broker-dealers “would record and report information, including the identity of the customer, resulting in a range of data elements that together provide the complete lifecycle of all orders and transactions in the U.S. equity and options markets.”

In her statement regarding the plan, SEC Chair Mary Jo White stated that the CAT “will generate enormous benefits for the SEC’s mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.”

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

FASB discusses credit impairment at April 27 meeting

Apr 27, 2016

At its April 27, 2016, meeting, the FASB discussed its credit impairment project and the progress of the transition resource group (TRG) on credit losses. The Board authorized the staff to draft a final standard and also made tentative decisions related to (1) credit quality disclosures, (2) the effective date of the final standard and whether the guidance can be early adopted, and (3) the costs and benefits of the final standard.

The final ASU is expected by the end of the second quarter of 2016. The FASB staff will continue to assess and present to the Board any additional issues identified during the drafting of the final ASU.

Until June 2012, the FASB and the IASB jointly deliberated an expected-loss impairment model, which was broadly similar to the IFRS 9 impairment approach issued by the IASB on July 24, 2014. In response to feedback from U.S. constituents on the joint model, however, the FASB decided to develop an alternative expected credit loss model. Accordingly, the FASB’s new credit impairment approach differs from that under IFRSs.

For more information, see Deloitte’s related journal entry as well as the meeting minutes and press release on the FASB’s Web site.

FASB publishes new issue of "FASB Outlook"

Apr 26, 2016

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

This issue fea­tures:

  • Chair­man Russ Golden’s dis­cus­sion of the FASB’s implementation initiatives.
  • FASB member Tom Linsmeier’s discussion of the conceptual framework, reporting financial performance, intangible assets, and the future of international convergence.
  • FASB member Marc Siegel’s discussion of the use of GAAP-based cash flow statements and how it can be improved.
  • A look into the hedge accounting project and the related upcoming exposure draft.
  • An update on the implementation of the new revenue standard.
  • A video on the key aspects of the GAAP taxonomy.

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

SEC updates EDGAR filer manual and technical specifications

Apr 25, 2016

The SEC has updated its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) System Filer Manual (Volume II) to include new submission forms related to the registration of security-based swap dealers and major security-based swap participants.

In ad­di­tion, the SEC has implemented ABS, Form 17-H, and SBS entity forms XML technical specifications.

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

PCAOB issues practice alert on audit document alterations

Apr 22, 2016

The PCAOB has issued Staff Audit Practice Alert No. 14, "Improper Alteration of Audit Documentation,” which reminds auditors of serious disciplinary actions that can result from the improper alteration of audit documentation in connection with a PCAOB inspection or investigation.

The alert notes that “[c]hanges and additions to audit documentation, if any, following the documentation completion date must be made strictly in accordance with AS 1215.”

For more in­for­ma­tion, see the press release, prac­tice alert, and Enforcement Spotlight on the PCAOB’s Web site.

Highlights from the FASB’s April 20 meeting

Apr 22, 2016

At its April 20, 2016, meeting, the FASB (1) discussed feedback it has received on its proposed Accounting Standards Update (ASU) on clarifying the scope of ASC 610-20 and accounting for partial sales of nonfinancial assets; (2) ratified the consensus of the Emerging Issues Task Force (EITF) on Issue No. 16-A, "Restricted Cash"; and (3) added two projects to its agenda.

Clarifying the scope of ASC 610-20 and accounting for partial sales of nonfinancial assets

The FASB discussed feedback it has received from external reviewers on a draft of its proposed ASU, the comment period for the proposed guidance, and the results of its cost-benefit analysis. The Board directed its staff to draft a proposed ASU with a 60-day comment period for vote by written ballot. For more information, see the meeting minutes on the FASB's Web site.

Ratification of EITF tentative conclusion

The FASB voted to approve the consensus-for-exposure reached by the EITF at its March 3, 2016, meeting on Issue No. 16-A, "Restricted Cash," and directed its staff to draft a proposed ASU with a 60-day comment period for vote by written ballot. For more information, see the meeting minutes on the FASB's Web site.

New projects on FASB’s agenda

The FASB decided to add two projects to its agenda:

  • Employee benefit plans — phase 2 — This project will address the lack of presentation and disclosure guidance on employee benefit plans that have investments held in master trusts.
  • Revenue recognition of grants and contracts by not-for-profit entities — This project aims to improve and clarify existing guidance on revenue recognition of grants and contracts by not-for-profit entities.

The FASB decided not to add to its agenda projects on (1) the effects of yieldco dropdown transactions on earnings per share and (2) the presentation of gains and losses from the sale of a business. For more information, see the meeting minutes on the FASB's Web site.

FASB proposes technical corrections and improvements to the Codification

Apr 21, 2016

The FASB has issued a proposed ASU, “Technical Corrections and Improvements,” which would make minor changes to the FASB Accounting Standards Codification.

The tech­ni­cal cor­rec­tions are divided into four main cat­e­gories:

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

Com­ments on the pro­posed ASU are due by July 5, 2016.

For more in­for­ma­tion, see the pro­posed ASU on the FASB’s Web site.

First FASB-only revenue recognition TRG meeting held

Apr 20, 2016

On April 18, 2016, the transition resource group (TRG) for revenue recognition, which was created by the FASB and IASB to address potential issues related to the implementation of the boards’ new revenue standard, held its first FASB-only session.

Topics discussed at the meeting included:

  • Scope considerations related to incentive-based capital allocations, such as carried interests.
  • Considering the class of customer in the evaluation of whether a customer option gives rise to a material right.
  • Scope considerations for financial institutions.
  • Evaluating how control is transferred over time.
  • Treatment of contract assets in contract modifications.

Editor’s Note: On January 21, 2016, the IASB announced that it has completed its decision-making process related to clarifying the new revenue standard and that it no longer plans to schedule TRG meetings for IFRS constituents. Therefore, TRG meetings will now be FASB-only; however, IASB staff members may participate as observers.

The TRG’s next meeting is scheduled for July 25, 2016.

For more information, see Deloitte’s TRG Snapshot newsletter.

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