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August

SEC may grant filing relief to those affected by Hurricane Harvey

Aug 31, 2017

As part of monitoring the effect of Hurricane Harvey on the markets, the SEC is evaluating “the possibility of granting relief from filing deadlines and other regulatory requirements for those affected by the storm.” The SEC has provided contact information for affected entities and investment professionals that have questions or concerns about filing relief or other matters related to the hurricane’s impact.

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

PCAOB issues staff inspection brief on 2017 inspections of auditors of public companies

Aug 31, 2017

The PCAOB has published a staff inspection brief on its 2017 inspections of registered audit firms and their audits of issuers. The inspection brief “is intended to help investors, auditors, and others understand the areas of significant audit risks targeted by PCAOB inspectors, and encourage auditors to work to improve audit quality.”

For more information, see the press release and inspection brief on the PCAOB’s Web site.

 

FASB makes targeted improvements to hedge accounting requirements

Aug 28, 2017

The FASB has issued Accounting Standards Update (ASU) No. 2017-12, "Targeted Improvements to Accounting for Hedging Activities."

The ASU amends ASC 815 to "better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results." The Board believes that such amendments will (1) improve the transparency of information about an entity’s risk management activities and (2) simplify the application of hedge accounting.

For public business entities, the ASU’s amendments are effective for fiscal years beginning after December 15, 2018, and interim periods therein. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020. All entities are permitted to early adopt the ASU in interim periods after its issuance.

For more information, see the ASU, press release, FASB in Focus, video, and cost-benefit analysis on the FASB’s Web site. Also see Deloitte’s August 30, 2017, Heads Up newsletter.

SEC staff updates Financial Reporting Manual

Aug 25, 2017

The SEC’s Division of Corporation Finance has published an update to its Financial Reporting Manual (FRM).

The updates include:

  • A new section that “describes communications with CF-OCA and provides contact information.”
  • Revisions to Section 2065 and the index to “clarify that questions about applying the guidance on abbreviated financial statements to a predecessor entity should be directed to CF-OCA.”
  • Revisions to Sections 10220.1 and 10220.5 to “clarify the guidance on the omission of financial information from draft and filed registration statements.” The updates in Section 10220.1 omit previous guidance, refer users via hyperlink to newly issued Securities Act C&DI 101.4, and note that that C&DI 101.05 addresses similar matters for non-EGC issuers. The updates in Section 10220.5c delete previous guidance and refer users via hyperlink to FAST Act C&DI, Question 2.

For more information, see the FRM on the SEC’s Web site. Also see Deloitte's updated Heads Up newsletter.

CAQ releases highlights of May 2017 meeting between IPTF and SEC staff

Aug 25, 2017

The Center for Audit Quality (CAQ) has released the highlights of the May 16, 2017, joint meeting between the SEC staff and the CAQ’s International Practice Task Force (IPTF).

Topics dis­cussed at the meeting in­cluded:

  • Mon­i­tor­ing in­fla­tion in certain coun­tries.
  • FAST Act amendments to the JOBS ACT and IFRS reporting.
  • The XBRL IFRS taxonomy.
  • Non-GAAP financial measures under IFRSs.
  • SEC staff matters.

The next meeting between the IPTF and the SEC staff is scheduled for November 21, 2017. For more in­for­ma­tion, see the meeting high­lights on the CAQ’s Web site.

FAF trustees add new members to PCC

Aug 23, 2017

The Financial Accounting Foundation’s (FAF’s) board of trustees has announced the appointment of Jeremy Dillard, Michael Minnis, Dev Strischek, and Frank Tarallo to the Private Company Council (PCC). The new PCC members will begin their three-year terms on January 1, 2018.

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

FAF issues report affirming effectiveness of GASB’s consultation process policy

Aug 23, 2017

The Financial Accounting Foundation’s (FAF’s) board of trustees has issued a report, “Three-Year Review of GASB Scope of Authority: Consultation Process Policy,” in which it affirms the effectiveness of the Governmental Accounting Standards Board’s (GASB’s) consultation process policy.

The report is a result of a three-year review by the FAF into “whether the consultation process is meeting its objectives to resolve effectively and efficiently GASB Scope issues and to assist the GASB in accomplishing its standard-setting mission.” The FAF trustees agreed that the process should be retained without modification.

The FAF will examine the GASB’s policy again in five years. For more information, see the press release and report on the FAF’s Web site.

SEC updates announcement regarding expansion of nonpublic review process for draft registration statements and publishes new C&DIs

Aug 21, 2017

The SEC has updated its June 29, 2017, announcement that it is extending to all companies benefits that are similar to those it has extended to emerging growth companies (EGCs) regarding the confidential review process for draft registration statements under the Jumpstart Our Business Startups (JOBS) Act. The updates are intended to clarify the factors a company considers in determining whether it is eligible to use the expanded nonpublic review process.

The announcement notes that the nonpublic review process is “available for Securities Act registration statements prior to the issuer’s initial public offering date and for Securities Act registration statements within one year of the IPO. In identifying the initial public offering date, we will refer to Section 101(c) of the JOBS Act. The nonpublic review process is available for the initial registration of a class of securities under Exchange Act Section 12(b) on Form 10, 20-F or 40-F.”

In addition, the SEC’s Division of Corporation Finance has published two new compliance and disclosure interpretations (C&DIs) related to Securities Act forms. The new C&DIs (Question 101.04 and Question 101.05) clarify when an EGC and a non-EGC, respectively, may omit from its draft registration statement interim and annual financial information that it reasonably believes will not need to be presented separately at the time it files its registration statement publicly. Question 101.04 was added to reflect the updates the SEC made to Question 1 of its Fixing America's Surface Transportation (FAST) Act C&DIs.

For more information about the SEC’s updated announcement, see the press release on the SEC’s Web site as well as Deloitte's Heads Up newsletter.

 

SEC updates interpretive guidance on revenue recognition

Aug 21, 2017

The SEC has issued the following two releases to update its interpretive guidance on revenue recognition: “Commission Guidance Regarding Revenue Recognition for Bill-and-Hold Arrangements” and “Updates to Commission Guidance Regarding Accounting for Sales of Vaccines and Bioterror Countermeasures to the Federal Government for Placement into the Pediatric Vaccine Stockpile or the Strategic National Stockpile.” In addition, the SEC’s Office of the Chief Accountant and its Division of Corporation Finance have issued Staff Accounting Bulletin (SAB) No. 116.

The bill-and-hold interpretive release states that upon their adoption of the FASB’s guidance on revenue recognition (ASC 606), “registrants should no longer rely on the guidance in Securities Exchange Act Release No. 23507 and Accounting and Auditing Enforcement Release No. 108, In the Matter of Stewart Parness, which set forth the criteria to be met in order to recognize revenue when delivery has not occurred.”

The vaccines and bioterror interpretative release and SAB 116 conform existing SEC guidance with ASC 606.

For more information, see Deloitte's related journal entry as well as the press release on the SEC’s Web site.

PCAOB chairman to depart organization

Aug 18, 2017

SEC Chairman Jay Clayton has announced that PCAOB Chairman James Doty will be stepping down from his position as soon as his successor and new Board members are appointed.

Chairman Doty began his tenure at the PCAOB in 2011 and, as mentioned in Clayton’s public statement, “has played a critical role in the development and success of the organization.”

For more information, see the public statement on the SEC’s Web site.

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