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July

FASB makes targeted improvements to lease accounting guidance

Jul 31, 2018

The FASB has issued Accounting Standards Update (ASU) No. 2018-11, “Leases (Topic 842): Targeted Improvements.”

The ASU provides (1) an optional transition method that entities can use when adopting ASC 842 and (2) a “practical expedient that permits lessors to not separate nonlease components from the associated lease component if certain conditions are met.”

For more information, see the press release and ASU on the FASB’s Web site. Also, stay tuned for Deloitte's upcoming Heads Up on this topic.

CAQ publishes resource on critical audit matters

Jul 27, 2018

The CAQ has issued a publication, “Critical Audit Matters: Key Concepts and FAQs for Audit Committees, Investors, and Other Users of Financial Statements.”

The publication provides information on:

  • Understanding critical audit matters (CAM).
  • CAM reporting in the auditor’s report.
  • Auditor reporting occurring outside the United States.
  • Differences between PCAOB and IAASB auditor reporting standards.

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

Highlights of the FASB’s July 25 meeting

Jul 26, 2018

At its July 25, 2018, meeting, the FASB discussed its projects on (1) narrow-scope improvements to the lessor accounting guidance; (2) implementation of the guidance on credit losses, and (3) targeted improvements to the guidance on collaborative arrangements.

Narrow-scope improvements to lessor accounting guidance

The Board discussed proposed amendments related to several implementation issues associated with FASB Accounting Standards Codification Topic 842, Leases, including sales taxes and other similar taxes collected from lessees, certain lessor costs paid directly by lessees, and recognition of variable payments for contracts with lease and nonlease components. The Board directed its staff to draft a proposed 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.

Financial instruments — credit losses

The Board discussed proposed Codification improvements to FASB Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments, and made tentative decisions on (1) the transition and effective date for nonpublic business entities and (2) operating lease receivables. The Board di­rected its staff to draft a proposed 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.

Collaborative arrangements — targeted improvements

The Board dis­cussed feedback received on its proposed ASU Collaborative Arrangements (Topic 808): Targeted Improvements and made tentative decisions on various topics, including scope, unit of account, transactions directly related to third-party sales, presentation, illustrative examples, transition, and effective date. The Board di­rected its 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 proposes rule on disclosures related to certain registered debt offerings

Jul 25, 2018

The SEC has issued a proposed rule, “Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities,” which would amend certain disclosure requirements in Regulation S-X, Rules 3-10 and 3-16.

Among other amendments, the proposal would:

  • Continue to permit “the omission of separate financial statements of subsidiary issuers and guarantors when certain conditions are met and the parent company provides supplemental financial and non-financial disclosure about the subsidiary issuers and/or guarantors and the guarantees.”
  • Replace “condensed consolidating financial information, as specified in existing Rule 3-10, with certain proposed financial and non-financial disclosures.”
  • Allow certain disclosures “to be provided outside the footnotes to the parent company’s audited annual and unaudited interim consolidated financial statements.”

Com­ments on the proposed rule are due 60 days after the date of its pub­li­ca­tion in the Federal Reg­is­ter. For more in­for­ma­tion, see the press release and pro­posed rule on the SEC’s Web site.

FASB staff proposes taxonomy improvements

Jul 20, 2018

The FASB staff has issued proposed taxonomy improvements related to (1) Accounting Standards Update (ASU) Nos. 2018-09, “Codification Improvements,” and 2018-10, “Codification Improvements to Topic 842, Leases,” and (2) the proposed ASU, “Updating the Definition of Collections.”

Com­ments on the pro­posed tax­on­omy im­prove­ments related to Codification improvements are due by August 14, 2018. Com­ments on the pro­posed tax­on­omy im­prove­ments related to Codification improvements to ASC 842 are due by August 17, 2018. Comments on the proposed taxonomy improvements related to the definition of collections are due by August 10, 2018.

SEC issues final rule on compensatory arrangements

Jul 18, 2018

The SEC has issued a final rule, “Rule 701 — Exempt Offerings Pursuant to Compensatory Arrangements,” which increases “from $5 million to $10 million the aggregate sales price or amount of securities sold during any consecutive 12-month period in excess of which the issuer is required to deliver additional disclosures to investors.

In addition, the SEC has issued a concept release to solicit feedback on ways to modernize existing rules related to compensatory arrangements.

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

SEC issues final rule to amend ATS regulations

Jul 18, 2018

The SEC has issued a final rule, “Regulation of NMS Stock Alternative Trading Systems,” that enhances “transparency and oversight of alternative trading systems (ATSs) that trade stocks listed on a national securities exchange (NMS Stock ATSs).”

Specifically, the final rule will “require NMS Stock ATSs to publicly disclose detailed information about their operations and the ATS-related activities of their broker-dealer operators.”

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

FASB makes improvements to leasing guidance

Jul 18, 2018

The FASB has issued Accounting Standards Update (ASU) No. 2018-10, “Codification Improvements to Topic 842, Leases.”

The ASU makes improvements to the following aspects of the guidance in ASC 842:

  • Residual value guarantees.
  • Rate implicit in the lease.
  • Lessee’s reassessment of lease classification.
  • Lessor’s reassessment of lease term and purchase option.
  • Variable lease payments that depend on an index or a rate.
  • Investment tax credits.
  • Lease term and purchase option.
  • Transition guidance related to amounts previously recognized in business combinations.
  • Certain transition adjustments.
  • Transition guidance for leases previously classified as capital leases under ASC 840.
  • Transition guidance related to modifications to leases previously classified as direct financing or sales-type leases under ASC 840.
  • Transition guidance related to sale-and-leaseback transactions.
  • Impairment of net investment in the lease.
  • Unguaranteed residual assets.
  • Effect of initial direct costs on rate implicit in the lease.
  • Failed sale-and-leaseback transactions.

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

FASB makes technical corrections and improvements to Codification

Jul 17, 2018

The FASB has issued Accounting Standards Update (ASU) No. 2018-09, “Codification Improvements.”

The ASU’s amendments “clarify, correct errors in, or make minor improvements to the Codification.” Specifically, the ASU makes improvements to the following ASC topics:

  • ASC 220-10, Income Statement — Reporting Comprehensive Income.
  • ASC 470-50, Debt — Modifications and Extinguishments.
  • ASC 480-10, Distinguishing Liabilities From Equity.
  • ASC 718-740, Compensation — Stock Compensation — Income Taxes.
  • ASC 805-740, Business Combinations — Income Taxes.
  • ASC 815-10, Derivatives and Hedging.
  • ASC 820-10, Fair Value Measurement.
  • ASC 940-405, Financial Services — Brokers and Dealers — Liabilities.
  • ASC 962-325, Plan Accounting — Defined Contribution Pension Plans — Investments — Other.

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

FASB discusses interim reporting disclosures

Jul 12, 2018

At its July 11, 2018, meeting, the FASB discussed its project on interim reporting disclosures and directed its staff to develop principles for interim disclosure and to conduct additional research related to the project.

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

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