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IAASB publishes comparison with PCAOB auditor reporting proposal

May 27, 2016

The International Auditing and Assurance Standards Board (IAASB) has published “The New Auditor’s Report: A Comparison Between the ISAs and the PCAOB Reproposal.”

The publication compares the IAASB’s auditor reporting standards (which were updated in January 2015) with the PCAOB’s recently reproposed standard, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. The publication “focuses on a comparison between the IAASB’s concept of Key Audit Matters (KAM), as set out in ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report, and the PCAOB’s concept of Critical Audit Matters (CAM).”

The IAASB’s comparison is available on the IFAC’s Web site (registration is required to view the publication).

FASB taxonomy staff issues implementation guides

May 27, 2016

The FASB recently issued two U.S. GAAP taxonomy implementation guides, one final and one proposed.

The objective of the final implementation guide, Dimensional Modeling for Financing Receivable Disclosures, is to “help users of the Taxonomy understand how the modeling for disclosures of financing receivables is structured within the Taxonomy.”

The pro­posed im­ple­men­ta­tion style guide, Decision Tree for Hierarchical and Distinct Domains, would “provide guidance for determining when to use Hierarchical Domains or Distinct Domains for dimensional modeling included in the Taxonomy.” Comments on the proposed guide are due by July 25, 2016.

ASEC proposes audit data standards for inventory subledger account

May 20, 2016

The AICPA Assurance Services Executive Committee (ASEC) has issued an exposure draft proposing a recommended standard format for fields and files related to the inventory subledger frequently requested by internal and external auditors.

Comments on the proposal are due by August 15, 2016. For more information, see the exposure draft on the AICPA’s Web site.

FAF issues 2015 annual report

May 19, 2016

The Financial Accounting Foundation (FAF) has released its 2015 annual report. The report, whose theme is “Serving the Financial Statement User,” focuses on how the FAF, FASB, and GASB “serve capital markets through their specific roles in the standard-setting process.”

In addition to sum­ma­rizing those organizations’ ac­com­plish­ments over the past year, the annual report features comments by 16 financial statement users, including institutional and retail investors, municipal analysts, and data aggregators, on how high-quality financial reporting standards are important to their work. For more in­for­ma­tion, see the press release and annual report on the FASB’s Web site.

FASB proposes technical corrections and improvements to its new revenue standard

May 18, 2016

The FASB has issued a proposed Accounting Standards Update (ASU), “Technical Corrections and Improvements to Update 2014-09, ‘Revenue From Contracts With Customers,’” which would make minor changes to the Board’s new revenue guidance.

Instead of addressing these changes as part of its technical corrections and improvements project, the FASB issued the proposed ASU separately “to increase stakeholders’ awareness of the proposals and to expedite improvements to Update 2014-09.” The tech­ni­cal cor­rec­tions affect the following narrow aspects of the new revenue standard:

  • Preproduction costs related to long-term supply arrangements.
  • Contract costs — impairment testing.
  • Contract costs — interaction of impairment testing with guidance in other topics.
  • Provisions for losses on construction-type and production-type contracts.
  • Scope of the new revenue standard.
  • Disclosure of remaining performance obligations.
  • A contract modification example.
  • Fixed-odds wagering contracts in the casino industry.
  • Cost capitalization for advisers to private and public funds.

Com­ments on the pro­posed ASU are due by July 2, 2016.

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

SEC staff updates C&DIs on non-GAAP measures

May 17, 2016

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretations (C&DIs) on non-GAAP measures to reflect its current views on registrants' use of such measures.

The updated guidance addresses questions on the presentation and composition of non-GAAP measures (as well as the most directly comparable GAAP measures) and the use of specific measures such as "funds from operations" and "free cash flow."

For more information, see Deloitte's related journal entry as well as the C&DIs the SEC’s Web site.

Crowdfunding rules effective; SEC publishes interpretive and compliance guidance

May 16, 2016

Beginning today, eligible companies are allowed to raise capital by using the SEC’s crowdfunding regulations. To help them understand the new requirements, the SEC has issued (1) eight new compliance and disclosure interpretations (C&DIs) and (2) a small-entity compliance guide.

The eight C&DIs cover the following topics: crowdfunding exemption and requirements, disclosure requirements, advertising, and promoter compensation.

The compliance guide, Regulation Crowdfunding: A Small Entity Compliance Guide for Issuers, summarizes and explains the SEC’s October 2015 final rule on crowdfunding.

FASB issues proposed ASU to simplify goodwill accounting

May 12, 2016

The FASB has issued a proposed ASU, “Simplifying the Accounting for Goodwill.”

Under the proposed amendments, “an entity would perform its annual, or any interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.” The proposed ASU would also remove “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.”

After considering stakeholder feedback, the FASB will determine the effective date and whether early adoption will be permitted for the one-step impairment test.

Comments on the proposal are due by July 11, 2016. For more information, see the proposed ASU on the FASB’s Web site.

FASB discusses simplifying the equity method at May 11 meeting

May 12, 2016

At its May 11, 2016, meeting, the FASB discussed its project on simplifying the equity method of accounting.

The FASB discussed alternatives for improving the equity method of accounting that are based on feedback received on its June 2015 proposed ASU Simplifying the Equity Method of Accounting. The Board concluded that there is “insufficient support” to change the equity method of accounting and voted to remove the project from its agenda.

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

PCAOB reproposes changes to the auditor’s reporting model

May 12, 2016

The PCAOB has reproposed its auditor reporting standard, “The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion.” Like the original proposal, the reproposal is intended to significantly enhance the auditor’s reporting model and retain the current “pass/fail” approach while increasing the amount of other information included in auditors’ reports.

The reproposal:

  • Includes a new required section of the auditor’s report describing critical audit matters (CAMs).
  • Narrows the definition of CAMs.
  • Excludes the following from the requirements related to CAMs: broker-dealers; investment companies other than business development companies; and employee stock purchase, savings, and similar plans.
  • Calls for the addition of new elements to the auditor’s report, including statements about the requirement of auditor independence and auditor tenure.

Comments on the reproposal are due by August 15, 2016. For more information, see Deloitte’s related journal entry as well as the reproposal, press release, and fact sheet on the PCAOB’s Web site.

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