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Highlights from the FASB’s March 29 meeting

Mar 31, 2017

At its March 29, 2017, meeting, the IASB gave the FASB an update regarding the former’s projects on the conceptual framework and financial instruments with characteristics of equity. No technical decisions were made.

In addition, the Board ratified the consensus that the EITF reached on Issue No. 16-C, “Determining the Customer of the Operation Services in a Service Concession Arrangement,” at its March 16, 2017, meeting. The Board directed the staff to draft a final ASU related to this consensus for a vote by written ballot.

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

FASB issues guidance on interest recognition for investments in callable debt securities

Mar 31, 2017

The FASB has issued Accounting Standards Update (ASU) No. 2017-08, “Premium Amortization on Purchased Callable Debt Securities,” which is intended to enhance “the accounting for the amortization of premiums for purchased callable debt securities.”

Specifically, the ASU shortens the amortization period for certain callable debt securities purchased at a premium by requiring that the premium be amortized to the earliest call date. The ASU is being issued in response to concerns from stakeholders that “too much interest income [is being recognized] before a borrower calls the debt security, followed by the recognition of a loss on the call date.”

The ASU’s amend­ments are ef­fec­tive for public busi­ness en­ti­ties for interim and annual periods be­gin­ning after De­cem­ber 15, 2018. For other en­ti­ties, the amend­ments are ef­fec­tive for annual periods be­gin­ning after De­cem­ber 15, 2019, and interim periods there­after. Early adoption is permitted.

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

SEC appoints new deputy chief accountant

Mar 30, 2017

The SEC has appointed Sagar S. Teotia as deputy chief accountant in the Office of the Chief Accountant.

Mr. Teotia joins the SEC from Deloitte & Touche LLP where he was a partner in the National Office Accounting Consultation Group. In addition, he served as an SEC accounting fellow in the Office of the Chief Accountant from 2009 to 2011.

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

IASB publishes discussion paper on disclosure principles

Mar 30, 2017

The IASB has published a discussion paper (DP) that explores principles for streamlining financial statement disclosures. The DP is being issued in response to stakeholder feedback indicating that current disclosures are often ineffective and contain too much irrelevant, and too little relevant, information.

Comments on the DP are due by October 2, 2017. For more information, see the press release, DP, and Snapshot on the IASB’s Web site.

IASB proposes amendments to guidance on operating segments

Mar 29, 2017

The IASB has published for public comment an exposure draft (ED) that would amend the guidance in IFRS 8, “Operating Segments.”

The amendments would:

  • “[C]larify and emphasise the criteria that must be met before two operating segments may be aggregated.”
  • “[R]equire companies to disclose the title and role of the person or group that performs the function of the chief operating decision maker.”
  • “[R]equire companies to provide information in the notes to the financial statements if segments in the financial statements differ from segments reported elsewhere in the annual report and in accompanying materials.”

The ED would also amend the guidance in IAS 34 on interim financial reporting to “require companies that change their segments to provide restated segment information for prior interim periods earlier than they currently do.”

Comments on the ED are due by July 31, 2017. For more information, see the press release and ED on the IASB’s Web site.

Highlights from the FASB’s March 22 meeting

Mar 23, 2017

At its March 22, 2017, meeting, the FASB discussed its projects on (1) hedging and (2) liabilities and equity.

Accounting for financial instruments — hedging

The Board made decisions related to its September 2016 proposed ASU, Targeted Improvements to Accounting for Hedging Activities, on (1) cross currency basis spreads and (2) recognition related to excluded components.

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

Liabilities and equity — targeted improvements

The Board discussed comment-letter feedback received on its December 2016 proposed ASU, I. Accounting for Certain Financial Instruments With Down Round Features, and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception. The feedback concerned (1) accounting for instruments with down-round features, (2) the indefinite deferral in ASC 480 related to mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests, and (3) navigation of the Codification.

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

SEC amends settlement cycle for broker-dealer securities transactions

Mar 23, 2017

The SEC has issued a final rule, “Amendment to Securities Transaction Settlement Cycle.”

The objective of the amendment is to “enhance efficiency, reduce risk, and ensure a coordinated and expeditious transition by market participants to a shortened standard settlement cycle.”

The amendment will become effective on September 5, 2017.

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

GASB issues omnibus statement

Mar 21, 2017

The GASB has issued Statement No. 85, “Omnibus 2017.”

Statement 85 addresses “practice issues that have been identified during implementation and application of certain GASB Statements.” Topics covered in the Statement include “issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits . . . ).”

Statement 85 is effective for reporting periods beginning after June 15, 2017. Early application is encouraged.

For more information, see Statement 85 on the GASB’s Web site.

EITF discusses service concession arrangements at March meeting

Mar 17, 2017

At its March 16, 2017, meeting, the EITF reached a final consensus on Issue No. 16-C, “Determining the Customer of the Operation Services in a Service Concession Arrangement.”

For a de­tailed summary of the meeting, see De­loitte’s March 2017 EITF Snap­shot.

CAQ publishes report on fraud and enhancing financial reporting

Mar 17, 2017

The CAQ has issued a report, “Addressing Challenges for Highly Subjective and Complex Accounting Areas.”

The report summarizes discussions held during two 2016 workshops that explored “issues that were identified in an analysis of enforcement actions in which the SEC (1) took an action against an issuer or individual because of a securities violation and (2) asserted that there were issues with the company’s ICFR.” In addition, the report contains key recommendations related to accounting policies, internal controls, and staffing challenges.

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

Correction list for hyphenation

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