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October

FASB proposes technical correction for not-for-profit entities

Oct 28, 2016

The FASB has issued a proposed ASU, “Technical Correction to Update No. 2016-14, ‘Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities’ — Endowment Reporting.”

The proposed ASU would remove from ASC 958 the words “that contain no purpose restrictions,” which had been added by ASU 2016-14. The proposal would therefore clarify “the minimum requirements for the reconciliation that [a not-for-profit entity] is required to disclose if it has endowment funds.”

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

SEC proposes universal proxy card requirement

Oct 26, 2016

The SEC has issued a proposed rule, “Universal Proxy.”

The proposal would amend Rule 14a-4 of the Exchange Act “to require the use of universal proxy cards that would include the names of all nominees in contested board of directors’ elections.” Further, voting options and standards would be required in all director elections.

Comments on the proposed rule are due by January 9, 2017. For more information, see the press release and proposed rule on the SEC’s Web site.

SEC issues guidance on intrastate and regional securities offerings

Oct 26, 2016

The SEC has issued a final rule, “Exemptions to Facilitate Intrastate and Regional Securities Offerings.”

The new rule modernizes and updates “the existing intrastate offering framework that permits companies to raise money from investors within their state without concurrently registering the offers and sales at the federal level.” In addition, the final rule “amends Rule 504 of Regulation D under the Securities Act to increase the aggregate amount of securities that may be offered and sold from $1 million to $5 million”; as a result of these changes, Rule 505 has been repealed.

The final rule will be effective on May 22, 2017, except for the revised Rule 147 and Rule 147A which will be effective on April 20, 2017 and the amendments to Rule 504 and Rule 30-1 which will be effective on January 20, 2017.

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

FASB amends consolidation guidance related to common control

Oct 26, 2016

The FASB has issued ASU 2016-17, “Interests Held Through Related Parties That Are Under Common Control.”

The ASU amends “the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE.”

For more information, see Deloitte's related Heads Up newsletter as well as the final ASU on the FASB’s Web site.

FASB simplifies accounting for intra-entity asset transfers

Oct 24, 2016

The FASB has issued ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory.”

The ASU removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The ASU, which is part of the Board’s simplification initiative, is intended to reduce the complexity of U.S. GAAP and diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property.

For more in­for­ma­tion, see Deloitte's related Heads Up newsletter as well as the final ASU on the FASB’s Web site.

Highlights from the FASB’s October 19 meeting

Oct 20, 2016

At its October 19, 2016, meeting, the FASB discussed its projects on (1) simplifying the balance sheet classification of debt; (2) technical corrections and improvements to Accounting Standards Update No. 2014-09, “Revenue From Contracts With Customers”; and (3) technical corrections and improvements to the Codification.

Simplifying the balance sheet classification of debt

The FASB dis­cussed feedback received from stakeholders and made ten­ta­tive de­ci­sions about the project’s direction as well as about presentation, disclosures, waiver fees, the probability assessment related to waivers of debt covenant violations, and transition. In addition, the Board directed the staff to draft a proposed ASU for a vote by written ballot.

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

Technical corrections and improvements to ASU 2014-09

The FASB redeliberated and discussed comments received on its May 2016 and September 2016 proposed ASUs on technical corrections and improvements to the new revenue standard. The Board affirmed certain decisions related to these proposals and directed the staff to draft a final ASU for a vote by written ballot.

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

Technical corrections and improvements to the Codification

The FASB dis­cussed com­ments re­ceived on its pro­posed ASU Technical Corrections and Improvements; affirmed its decision to require disclosure of a change in valuation approach, valuation technique, or both; decided to expose for public comment a technical correction; and made decisions about the transition and effective date. In ad­di­tion, the Board di­rected the staff to draft a final ASU for a vote by written ballot.

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

SEC staff publishes C&DIs on Securities Act rules

Oct 20, 2016

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretations (C&DIs) related to Rule 701, “Exemption for Offers and Sales of Securities Pursuant to Certain Compensatory Benefit Plans and Contracts Relating to Compensation,” and Rule 144(d), “Holding Period for Restricted Securities,” of the Securities Act rules.

For more in­for­ma­tion, see Questions 271.04 and 271.24 as well as Section 532.06 of the C&DIs on the SEC’s Web site.

SEC staff publishes C&DIs on pay ratio disclosure

Oct 19, 2016

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretations (C&DIs) related to Regulation S-K to include guidance on Item 402(u), “Pay Ratio Disclosure.”

For more in­for­ma­tion, see Section 128C of the Regulation S-K C&DIs on the SEC’s Web site.

GASB proposes implementation guide

Oct 19, 2016

The GASB has issued a proposed implementation guide consisting of Q&As that would “clarify, explain, or elaborate on the requirements of GASB Statement No. 74, ‘Financial Reporting for Postemployment Benefit Plans Other Than Pensions Plans.’ ”

Comments on the proposed implementation guide are due by December 19, 2016. For more information, see the press release and proposed guide on the GASB’s Web site.

SEC issues guidance to enhance investment company reporting

Oct 13, 2016

The SEC has issued three final rules, “Investment Company Reporting Modernization,” “Investment Company Liquidity Risk Management Programs," and "Investment Company Swing Pricing.”

The new rules, which are part of the SEC’s initiative to enhance the monitoring and regulation of the asset management industry, will (1) enhance transparency and modernize the reporting of information by registered investment companies, (2) provide for liquidity risk management programs and disclosures by open-end management investment companies, and (3) permit the use of “swing pricing” by certain open-end management investment companies.

The final rule on investment company swing pricing is effective on November 19, 2018. The final rules on investment company liquidity risk management programs and reporting modernization are effective on January 17, 2017, except where mentioned in the final rules.

For more information, see the press release and final rules on the SEC’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.