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FASB announces restructuring of certain Codification topics

May 31, 2017

The FASB has announced that over the next several months, it will restructure certain Codification topics.

Although the content structure of some topics will be simplified, no guidance is changing as a result of these improvements. Most, but not all, of the changes will affect the industry topics. Changes will be made in maintenance updates to the Codification and information on the changes will be available on the FASB’s Codification Web site via a link in the status table of the affected topic or subtopic.

FASB discusses agenda consultation

May 26, 2017

At its May 24, 2017, meeting, the FASB discussed the results of staff research on Chapter 4 of its August 2016 invitation to comment, “Agenda Consultation,” on reporting performance and cash flows.

The Board discussed the following topics:

  • Segment reporting — The Board directed its staff to prepare a separate agenda request for a potential new project on segment reporting.
  • Performance statement — The Board discussed structure and disaggregation.
  • Cash flow statement — The Board directed its staff to draft a separate agenda request for a potential new project on targeted improvements to cash flow classification.
  • Articulation — The Board decided that it should not undertake additional work on this topic at this time.

No technical decisions were made during this session.

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

IASB requests feedback on the post-implementation review of IFRS 13

May 26, 2017

The IASB has issued a Request for Information (RFI), “Post-Implementation Review — IFRS 13 ‘Fair Value Measurement,’” to evaluate whether the standard is working as the Board intended.

The RFI focuses on:

  • “Disclosures about fair value measurements.”
  • “Prioritising Level 1 inputs or the unit of account.”
  • “Application of the concept of the highest and best use when measuring the fair value of non-financial assets.”
  • “Application of judgement in specific areas.”

The RFI also solicits feedback on whether the IASB should strive to maintain convergence with the FASB’s ASC 820, Fair Value Measurement, in any changes that might result from the post-implementation review.

Comments on the RFI are due by September 22, 2017. For more information, see Deloitte's IFRS in Focus newsletter as well as the press release and RFI on the IASB’s Web site.

CAQ issues publication on cybersecurity

May 25, 2017

The Center for Audit Quality (CAQ) has released a publication, “The CPA’s Role in Addressing Cybersecurity Risk — How the Auditing Profession Promotes Cybersecurity Resilience.”

This publication “explores the challenging cybersecurity landscape” and “provides perspective on [the] new AICPA framework, including a set of FAQs that can help senior management, boards of directors and other key capital markets stakeholders understand the framework's scope, how it is separate and apart from the financial statement and internal control over financial reporting audits, and the extent of related communications, among other topics.”

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

PCAOB announces open meeting to consider adoption of changes to the auditor’s report and proposal of new requirements related to auditing accounting estimates and use of specialists

May 24, 2017

The PCAOB has announced that it will hold an open meeting on June 1 at 10:00 a.m. (EDT) to consider (1) adopting a standard that would change the auditor’s reporting model and (2) proposing new requirements related to the auditing of accounting estimates and the use of specialists.

The open meeting will be streamed live via a link on the PCAOB’s Web site, and a recording will be available shortly after the meeting concludes.

If the PCAOB approves adoption of the standard, it will be submitted to the SEC for its consideration, which includes a public comment period. The PCAOB has not publicly stated the proposed effective date for the standard.

For more information, see Deloitte’s May 27, 2016, Audit & Assurance Update on the PCAOB’s proposed changes to the auditor’s model and Deloitte’s July 1, 2015, Heads Up on the June 18, 2015, meeting of the PCAOB’s Standing Advisory Committee, at which auditing accounting estimates and the use of specialists were discussed.

FASB discusses targeted improvements to related-party guidance for VIEs

May 19, 2017

At its May 18, 2017, meeting, the FASB discussed comments received on a draft of its proposed ASU on improvements to the related-party guidance for variable interest entities (VIEs).

The Board also made decisions related to (1) the determination of common control, (2) the application of VIE guidance for an entity that can no longer apply the private-company accounting alternative, (3) effective date and transition provisions, and (4) replacing economic interest with variable interest.

The Board directed its staff to begin drafting a proposed ASU for a vote by written ballot.

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

CAQ publishes audit planning alert for brokers and dealers

May 19, 2017

The Center for Audit Quality (CAQ) has published Alert #2017-02, “Audit Planning Alert for Auditors of Brokers and Dealers.”

The alert “identifies and discusses some of the more judgmental or complex areas of both the audit and attestation engagements, including areas that have been the subject of attention and focus by the [PCAOB] in its interim inspection process.”

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

FAF issues 2016 annual report

May 18, 2017

The Financial Accounting Foundation (FAF) has released its 2016 annual report.

The report “highlights the standard-setting activities of the FASB and the GASB in 2016—and how they contribute to better-informed decisions by investors, lenders, citizens, and others who rely on high-quality financial reporting.” In addition to summarizing those organizations’ accomplish¬ments over the past year, the annual report features a section on management’s discussion and analysis and audited financial statements.

For more information, see the press release and annual report on the FAF’s Web site.

FAF appoints new GASB vice-chairman

May 18, 2017

The board of trustees of the Financial Accounting Foundation (FAF) has named Jeffrey J. Previdi as vice-chairman of the GASB to replace Jan I. Sylvis, whose term ends on June 30, 2017.

Mr. Previdi’s term will begin on July 1, 2017.

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

IASB issues new insurance contracts standard

May 18, 2017

The IASB has published a new standard, IFRS 17, “Insurance Contracts,” which supersedes IFRS 4 and establishes principles for the recognition, measurement, presentation, and disclosure of insurance contracts.

The main objective of IFRS 17 is to reduce the diversity in practice that arose under IFRS 4, which allowed companies “to carry on accounting for insurance contracts using national accounting standards, resulting in a multitude of different approaches.” The new standard increases comparability “by requiring all insurance contracts to be accounted for in a consistent manner, benefiting both investors and insurance companies.”

IFRS 17 is effective for annual reporting periods beginning on or after January 1, 2021. Earlier application is permitted if both IFRS 15, Revenue From Contracts With Customers and IFRS 9, Financial Instruments, have also been applied. The standard should be applied retrospectively unless it is impracticable to do so; entities then have the option to use a modified retrospective approach or the fair value approach.

For more information, see Deloitte’s IFRS in Focus newsletter as well as the following resources on the IASB’s Web site:

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