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February

FASB issues guidance on employee benefit plan master trust reporting

Feb 27, 2017

The FASB issued Accounting Standards Update (ASU) No. 2017-06, “Employee Benefit Plan Master Trust Reporting,” in response to the EITF’s consensus on Issue 16-B.

The ASU requires the following:

  • Presentation within the plan’s financial statements of its interest in a master trust as a single line item.
  • Disclosure of the master trust’s other assets and liabilities and the balances related to the plan.
  • Elimination of required disclosures for Section 401(h) accounts that are already provided by the associated defined benefit plan
  • For a plan’s divided interest in a master trust, disclosure of the master trust’s investments by general type as well as by the dollar amount of the plan’s interest in each type.

For more information, see Deloitte’s November 2016 EITF Snapshot as well as the ASU on the FASB’s Web site.

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

Feb 24, 2017

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

Topics dis­cussed at the meeting in­cluded:

  • Mon­i­tor­ing in­fla­tion in certain coun­tries.
  • Transition questions related to the new leasing standard, IFRS 16.
  • Use of pre-acquisition and post-acquisition periods to satisfy Regulation S-X, Rule 3-05, requirements for other than initial registration statements.
  • Significant equity investee financial statements under Regulation S-X, Rule 3-09.
  • Use of IFRS XBRL taxonomy by FPIs.

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

Highlights from the FASB’s February 22 meeting

Feb 23, 2017

At its February 22, 2017, meeting, the FASB discussed its project on modification accounting under ASC 718 and revenue recognition of grants and contracts by not-for-profit entities.

Scope of modification accounting under ASC 718

The Board dis­cussed com­ments re­ceived on its November 2016 pro­posed ASU, Scope of Modification Accounting. The Board reaffirmed the proposed guidance and authorized its staff to draft a final 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.

Revenue recognition of grants and contracts by not-for-profit entities

The Board (1) discussed how the guidance on distinguishing between conditional and unconditional contributions could be improved and (2) tentatively decided to update the definition of a donor-imposed condition.

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

FASB issues guidance on derecognition and partial sales of nonfinancial assets

Feb 23, 2017

The FASB has issued Accounting Standards Update (ASU) No. 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.”

The ASU’s amendments include the following:

  • Clarification that “nonfinancial assets within the scope of [ASC] 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty.”
  • Clarification that “an entity should allocate consideration to each distinct asset by applying the guidance in [ASC] 606 on allocating the transaction price to performance obligations.”
  • A requirement for entities “to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (1) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with [ASC] 810 and (2) transfers control of the asset in accordance with [ASC] 606.”

The effective date of the new guidance and the transition methods are aligned with the requirements in the new revenue standard, as amended by ASU 2015-14, which delays the effective date of the new revenue standard (ASU 2014-09) by one year and permits early adoption on a limited basis.

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

AICPA issues SAS 132

Feb 23, 2017

The AICPA’s Auditing Standards Board has published Statement on Auditing Standards (SAS) No. 132, “The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern.”

SAS 132 provides guidance on an “auditor’s responsibilities in the audit of financial statements relating to the entity’s ability to continue as a going concern and the implications for the auditor’s report.” The new guidance will be effective for audits of financial statements for periods ending on or after December 15, 2017.

For more in­for­ma­tion, see SAS 132 on the AICPA’s Web site.

Highlights from the FASB’s February 15 meeting

Feb 17, 2017

At its February 15, 2017, meeting, the FASB discussed its project on hedging as well as its research on revenue recognition.

Financial instruments — hedging

The Board dis­cussed com­ments re­ceived on its Sep­tem­ber 2016 pro­posed ASU, Tar­geted Im­prove­ments to Ac­count­ing for Hedging Ac­tiv­i­ties, and made ten­ta­tive de­ci­sions on  (1) “[r]eturning to qualitative assessments of hedge effectiveness after performing a quantitative assessment of hedge effectiveness” and (2) “[p]otential changes to the requirements for private company hedge documentation.”

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

Revenue recognition research

The Board reviewed the staff’s research on nonrecurring engineering and preproduction costs and the related reimbursements from customers. No technical decisions were made.

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

President Trump signs resolution eliminating SEC disclosure rule

Feb 15, 2017

President Trump has signed H.J. Resolution 41, which eliminates the requirement under which issuers engaged in the commercial development of oil, natural gas, or minerals must disclose certain payments made to U.S. federal and foreign governments.

H.J. Resolution 41 repeals SEC Rule No. 34-78167, Disclosure of Payments by Resource Extraction Issuers, which was implemented as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

FASB holds podcast on stock compensation

Feb 15, 2017

The FASB has held an investor podcast that provides an overview of the amendments made by Accounting Standards Update (ASU) No. 2016-09, "Improvements to Employee Share-Based Accounting."

The ASU simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities.

The investor podcast is available on the FASB’s YouTube channel.

FASB discusses long-duration insurance contracts

Feb 09, 2017

At its February 8, 2017, meeting, the FASB discussed feedback received on its September 2016 proposed ASU, "Targeted Improvements to the Accounting for Long-Duration Contracts." No technical decisions were made.

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

SEC acting chairman requests feedback on implementation of pay ratio disclosure rule

Feb 07, 2017

Michael Piwowar, the SEC’s acting chairman, has requested public input on implementation issues associated with the SEC’s final rule, “Pay Ratio Disclosure.”

The final rule requires registrants — except foreign private issuers, registered investment companies, and emerging growth companies — to clearly disclose the relationship between executive compensation actually paid and the financial performance of the registrant in proxy or information statements in which executive compensation disclosures are required. Mr. Piwowar noted that since compliance with the rule became effective for fiscal years beginning on or after January 1, 2017, some issuers have “begun to encounter unanticipated compliance difficulties that may hinder them in meeting the reporting deadline.”

Comments should be submitted within the next 45 days. For more information, see the press release on the SEC’s Web site.

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