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June

PCAOB issues staff guidance on its new Form AP

Jun 29, 2016

The PCAOB has issued staff guidance intended to help auditors file reports on Form AP, “Auditor Reporting of Certain Audit Participants.” The Board also announced the launch of a Web resource page on Form AP.

In December 2015, the PCAOB adopted new rules and related amendments — which created Form AP — that require audit firms to disclose the name of the engagement partner and information about certain other audit participants.

The PCAOB’s staff guidance “covers provisions of the new rules, such as assigning engagement partner identification numbers and estimating audit hours when disclosing the participation of other accounting firms, among other things.”

The new Form AP Web resource page provides “additional resources to audit firms preparing to comply with the new rules, such as general instructions for the form and a sample form that can be downloaded for reference.”

For more information, see Deloitte's related journal entry.

CAQ issues publication on non-GAAP measures

Jun 28, 2016

The Center for Audit Quality (CAQ) has released a publication, “Questions on Non-GAAP Measures — A Tool for Audit Committees.”

The purpose of the publication is “to help audit committees continue to assess management's presentation, outside the audited financial statements, of performance metrics that do not conform to [GAAP].” Three main topics are addressed:

  • Transparency — Considerations related to “the purpose, prominence, and labeling of non-GAAP information, specifically in relation to traditional GAAP measurements.”
  • Consistency — The determination of “whether non-GAAP measures are consistent and balanced.”
  • Comparability — A comparison of a company’s presentation of non-GAAP measures with that of its peers.

For more information, see the press release and publication on the CAQ’s Web site.

SEC issues final rule on resource extraction disclosures

Jun 28, 2016

The SEC has issued a final rule, “Disclosure of Payments by Resource Extraction Issuers.”

The final rule, which implements Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requires “resource extraction issuers to include in an annual report information relating to any payment made by the issuer, a subsidiary of the issuer, or an entity under the control of the issuer, to a foreign government or the Federal Government for the purpose of the commercial development of oil, natural gas, or minerals.” The rule is designed to improve transparency, thereby helping to “combat global corruption and empower citizens of resource-rich countries to hold their governments accountable for the wealth generated by those resources.”

The final rule will become effective 60 days after the date of its publication in the Federal Register and must be complied with for fiscal years ending on or after September 30, 2018.

For more information, see Deloitte's related journal entry as well as the press release and final rule on the SEC’s Web site.

SEC proposes amendments to definition of smaller reporting company

Jun 28, 2016

The SEC has issued a proposed rule, “Amendments to Smaller Reporting Company Definition.”

The proposal “would expand the number of companies that qualify as smaller reporting companies, thus qualifying for certain existing scaled disclosures provided in Regulation S-K and Regulation S-X.” Specifically, the proposal would increase the qualification threshold from less than $75 million of public float to less than $250 million. Further, companies without a public float “would be permitted to provide scaled disclosures if [their] annual revenues are less than $100 million, as compared to the current threshold of less than $50 million in annual revenues.”

Comments on the proposed rule are due by August 30, 2016. For more information, see Deloitte's related journal entry as well as the press release and proposed rule on the SEC’s Web site.

IASB proposes amendments related to the definition of a business and accounting for previously held interests

Jun 28, 2016

The IASB has published an exposure draft (ED), “Definition of a Business and Accounting for Previously Held Interests — proposed amendments to IFRS 3 and IFRS 11.”

The amendments would clarify (1) “the definition of a business” and (2) “the accounting for previously held interests when an entity obtains control of a business that is a joint operation and when it obtains joint control of a business that is a joint operation.”

Editor’s Note: In November 2015, the FASB issued a proposed ASU, Clarifying the Definition of a Business. The ED indicates that the proposed amendments to IFRS 3 and the FASB’s proposed ASU are “based on substantially converged tentative conclusions.”

Comments on the ED are due by October 31, 2016. For more information, see the press release and ED on the IASB’s Web site.

SEC staff updates C&DIs on Securities Act rules

Jun 24, 2016

The staff in the SEC’s Division of Corporation Finance has updated Section 271 of its compliance and disclosure interpretations (C&DIs) on rules related to the Securities Act of 1933.

The updated guid­ance ad­dresses ques­tions about the completion of a merger transaction. For more in­for­ma­tion, see the C&DIs on the SEC’s Web site.

EU referendum in the United Kingdom

Jun 24, 2016

In the European Union (EU) referendum in the United Kingdom yesterday, which saw a turnout of 71.8 percent, 51.9 percent of the voters made clear that they think the country’s interests would be best served if it leaves the EU.

For more information, see Deloitte's related Financial Reporting Alert. Deloitte UK also has a Web site dedicated to the EU ref­er­en­dum, offering insight papers, per­spec­tives, and access to webinars on the potential meaning of this change.

FASB proposes changes to consolidation guidance related to common control

Jun 23, 2016

The FASB has issued a proposed ASU, “Interests Held Through Related Parties That Are Under Common Control.”

The pro­posal would “change the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a reporting entity that is a single decision maker of a VIE would treat indirect interests in the entity held through related parties that are under common control with the reporting entity."

Com­ments on the pro­posed ASU are due by July 25, 2016. For more in­for­ma­tion, see Deloitte's related journal entry as well as the pro­posed ASU on the FASB’s Web site.

Highlights from the June 20 FASB-IASB joint meeting

Jun 22, 2016

At the June 20, 2016, FASB-IASB joint meeting, the two boards gave updates on the current status of their respective business combination projects.

Specifically, the boards discussed:

  • Identifiable intangible assets in a business combination for public business entities and not-for-profit entities.
  • Accounting for goodwill for public business entities and not-for-profit entities.
  • Accounting for goodwill impairment.

No tentative decisions were made during the session.

For more information, see the observer notes on Deloitte’s IASPlus Web site as well as the tentative Board decisions on the FASB’s Web site.

IASB clarifies the classification and measurement of share-based payment transactions

Jun 20, 2016

The IASB has published amendments to IFRS 2,"Share-based Payment," that clarify the accounting requirements related to classification and measurement of share-based payment transactions.

Specifically, the amendments concern the:

  • Accounting for cash-set­tled share-based payment trans­ac­tions that include a performance condition.
  • Classification of share-based payment transactions with net settlement features.
  • Accounting for modifications of share-based payment transactions from cash-settled to equity-settled.

The amend­ments are effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

For more information, see the press release on the IASB’s Web site. The amendments are available on the eIFRS Web site (subscription required).

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