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July

CAQ releases highlights of May 2016 meeting between IPTF and SEC staff

Jul 29, 2016

The Center for Audit Quality (CAQ) has released the highlights of the May 17, 2016, joint meeting between the SEC staff and the CAQ’s SEC Regulations Committee and International Practice Task Force (IPTF).

Topics dis­cussed at the meeting in­cluded:

  • Mon­i­tor­ing in­fla­tion in certain coun­tries.
  • New NYSE rule related to interim financial information.
  • “Updating annual financial statements for retrospective accounting that is first reflected in a full set of interim financial statements, that are not needed to meet nine-month financial statement timeliness requirements under Item 8.A.5 of Form 20-F.”
  • “More current interim financial statements provided on a local GAAP basis (i.e., other than US GAAP or IFRS-IASB), that is not needed to meet nine-month financial statement timeliness requirements under Item 8.A.5 of Form 20-F.”
  • “More current interim financial information provided on a local GAAP basis (other than IFRS-IASB or US GAAP), for an FPI that files its annual financial statements under IFRS-IASB.”
  • “Period to be covered for changes in internal control over financial reporting in the first 10-K filed by an issuer that was previously an FPI filing annual reports on Form 20-F.”
  • SEC staff matters, including disclosure effectiveness, non-GAAP measures, and XBRL IFRS briefing.

For more in­for­ma­tion, see the meeting high­lights on the CAQ’s Web site.

Highlights from the FASB’s July 27 meeting

Jul 28, 2016

At its July 27, 2016, meeting, the FASB discussed its projects on (1) clarifying the definition of a business, (2) callable debt securities, and (3) inventory disclosures.

Clarifying the definition of a business

The FASB discussed feedback on its proposed ASU Clarifying the Definition of a Business. Although no tentative decisions were made at this meeting, the Board directed the staff to research certain aspects of the proposal.

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

Interest income associated with the purchase of callable debt securities

The FASB made tentative decisions on the scope of the amortization change for premiums, transition, and cost-benefit analysis. In addition, the Board determined that further research on interest income disclosures related to purchased financial assets is needed.

The FASB di­rected its staff to begin draft­ing a proposed ASU for a vote by written ballot. For more in­for­ma­tion, see De­loitte’s related journal entry as well as the meeting minutes on the FASB’s Web site.

Disclosure framework — disclosure review: inventory

The FASB discussed the outcome of outreach and research on potential changes to inventory disclosure requirements. No tentative decisions were made. For more in­for­ma­tion, see the meeting minutes on the FASB’s Web site.

FASB proposes guidance on employee benefit plans

Jul 28, 2016

The FASB has issued a proposed ASU, “Employee Benefit Plan Master Trust Reporting,” in response to the EITF consensus-for-exposure on Issue 16-B.

The proposed ASU would:

  • “Require a plan’s interest in a master trust and any change in interest in the master trust to be presented in single line items in the statement of net assets available for benefits and in the statement of changes in net assets for benefits.”
  • “Require all plans to disclose (1) their master trust’s other asset and liability balances and (2) the dollar amount of the plan’s interest in each of those balances.”
  • “Not require the plan to provide other applicable GAAP disclosures for the underlying investments held by a master trust.”
  • “Remove redundancy and not require the 401(h) account investment disclosures to be provided in the health and welfare benefit plan’s financial statements.”
  • “Require the health and welfare benefit plan to disclose the name of the defined benefit pension plan in which those investment disclosures are provided.”

Com­ments on the pro­posed ASU are due by September 26, 2016. For more in­for­ma­tion, see Deloitte’s June 2016 EITF Snapshot as well as the pro­posed ASU on the FASB’s Web site.

Group of CEOs publishes corporate governance principles

Jul 28, 2016

A group of CEOs has issued a set of commonsense corporate governance principles for public companies, boards of directors, and shareholders.

The principles focus on the following topics:

  • Composition, internal governance, and responsibilities of board of directors.
  • Shareholder rights.
  • Public reporting.
  • Board leadership.
  • Management — succession planning and compensation.
  • Role of asset managers in corporate governance.

For more information, see the press release and principles.

SEC staff updates C&DIs related to selling security holders

Jul 27, 2016

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretations (C&DIs) related to Item 507 of Regulation S-K.

The updated guid­ance ad­dresses how a registrant can “satisfy the obligation in Item 507 of Regulation S-K to disclose the nature of any position, office, or other material relationship that the selling security holder has had within the past three years with the registrant or any of its predecessors or affiliates” if the selling security holder is not a natural person. For more in­for­ma­tion, see Ques­tion 140.02 of the C&DIs on the SEC’s Web site.

In addition, the guidance in Question 240.04 related to selling security holders has been withdrawn.

FASB proposes improvements to income tax disclosures

Jul 26, 2016

As part of its disclosure framework project, the FASB has issued a proposed Accounting Standards Update (ASU), “Disclosure Framework — Changes to the Disclosure Requirements for Income Taxes.”

The pro­posed ASU requires all entities to provide the following disclosures:

  • “Description of an enacted change in tax law that is probable to have an effect on the reporting entity in a future period.”
  • “Income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign.”
  • “Income tax expense (or benefit) from continuing operations disaggregated between domestic and foreign.”
  • “Income taxes paid disaggregated between domestic and foreign, and the amount of income taxes paid to any country that is significant to total income taxes paid.”
  • “An explanation of circumstances that caused a change in assertion about the indefinite reinvestment of undistributed foreign earnings and the corresponding amount of those earnings.”
  • “The aggregate of cash, cash equivalents, and marketable securities held by foreign subsidiaries.”

In addition, the following disclosure requirements would apply only to public business entities:

  • “Within the reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period, settlements using existing deferred tax assets separate from those that have been or will be settled in cash.”
  • “The line items in the statement of financial position in which the unrecognized tax benefits are presented and the related amounts of such unrecognized tax benefits. If the unrecognized tax benefits are not presented in the statement of financial position, those amounts should be disclosed separately.”
  • “The amount and explanation of the valuation allowance recognized and/or released during the reporting period.”
  • “The total amount of unrecognized tax benefits that offsets the deferred tax assets for carryforwards.”

Com­ments on the pro­pos­al are due by September 30, 2016. For more in­for­ma­tion, see Deloitte's related Heads Up newsletter as well as the press release, FASB in Focus newslet­ter, and proposed ASU on the FASB’s Web site. 

SEC names interim chief accountant

Jul 21, 2016

The SEC has named Wesley Bricker as the interim chief accountant in the SEC’s Office of the Chief Accountant, which oversees accounting interpretations, professional practice issues, and international accounting matters. Mr. Bricker will hold the position while Chief Accountant James Schnurr recovers from a bicycle accident.

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

Summary of the July 2016 PCC meeting

Jul 19, 2016

At today’s meeting, the Private Company Council (PCC) discussed the FASB’s projects on (1) short-term improvements to the accounting for financial instruments with characteristics of both liabilities and equity, (2) balance sheet classification of debt, (3) disclosures by business entities about government assistance, and (4) financial performance reporting.

The next PCC meeting is sched­uled for September 30, 2016. For more in­for­ma­tion, see the media meeting recap and meeting minutes on the FASB’s Web site.

SEC staff updates C&DIs related to filing of Schedules 13D and 13G

Jul 15, 2016

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretations (C&DIs) related to filing Schedules 13D and 13G (Rule 13d-1).

The updated guid­ance ad­dresses whether a shareholder is exempt from filing on Schedule 13G on the basis of the provisions in the Hart-Scott-Rodino Act. For more in­for­ma­tion, see Ques­tion 103.11 of the C&DIs on the SEC’s Web site.

Highlights from the FASB’s July 13 meeting

Jul 14, 2016

At its July 13, 2016, meeting, the FASB discussed its projects on hedging and defined benefit plans.

Financial instruments — hedging

The FASB made tentative decisions related to the critical-terms-match method, the application of the shortcut method, transition, hedged forecasted transactions, and cost-benefit analysis.

The FASB di­rected its staff to begin draft­ing a proposed ASU for a vote by written ballot. For more in­for­ma­tion, see De­loitte’s related journal entry as well as the meeting minutes on the FASB’s Web site.

Disclosure framework — disclosure review: defined benefit plans

The FASB discussed feedback on its proposed ASU Changes to the Disclosure Requirements for Defined Benefit Plans and directed its staff to conduct additional research. For more in­for­ma­tion, see the meeting minutes on the FASB’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.