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November

GASB issues proposed implementation guide

Nov 28, 2018

The GASB has issued a proposed implementation guide, “Implementation Guidance Update — 2019,” which consists of Q&As that would “clarify, explain, or elaborate on” certain GASB Statements.

Topics addressed in the proposed guide’s Q&As include:

  • Cash flow reporting.
  • Postemployment benefits.
  • Derivative instruments.
  • Irrevocable split-interest agreements.
  • Tax abatement disclosures.

In addition, the proposed guide amends certain Q&As from previously issued implementation guides.

Comments on the proposed implementation guide are due by January 31, 2019. For more information, see the proposed guide on the GASB’s Web site.

SEC to review certain rules in accordance with the Regulatory Flexibility Act

Nov 26, 2018

The SEC has published a list of rules to be reviewed in accordance with Section 610 of the Regulatory Flexibility Act, which requires a review of rules that have a "significant economic impact upon a substantial number of small entities within ten years of the publication of such rules as final rules."

The SEC is seeking comments on "whether the rules should be continued without change, or should be amended or rescinded to minimize any significant economic impact of the rules upon a substantial number of such small entities."

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

FASB proposes narrow-scope amendments to guidance on financial instruments

Nov 20, 2018

The FASB has issued a proposed Accounting Standards Update (ASU), “Codification Improvements — Financial Instruments,” which would clarify and improve guidance related to credit losses, hedging, and recognition and measurement.

The proposed ASU would make improvements to the following aspects of financial instruments:

  • Accrued interest.
  • Transfers between classifications or categories for loans and debt securities.
  • Conforming amendment to ASC 310-40 and ASC 323-10.
  • Clarification that reinsurance recoverables are within the scope of ASC 326-20.
  • Projections of interest-rate environments for variable-rate financial instruments.
  • Consideration of prepayments in the determination of the effective interest rate.
  • Consideration of estimated selling costs when foreclosure is probable.
  • Partial-term fair value hedges of interest rate risk.
  • Amortization of fair value hedge basis adjustments.
  • Disclosure of fair value hedge basis adjustments.
  • Consideration of the hedged contractually specified interest rate under the hypothetical derivative method.
  • Scope for not-for-profit entities.
  • Hedge accounting provisions applicable to certain private companies and not-for-profit entities.
  • Application of a first-payments-received cash flow hedging technique to overall cash flows related to a group of variable interest payments.
  • Update to ASU 2017-12 transition guidance.
  • Scope clarifications for ASC 320-10 and 321-10.
  • Fair value disclosures related to held-to-maturity debt securities.
  • Applicability of ASC 820 to the measurement alternative.
  • Remeasurement of equity securities at historical exchange rates.
  • Vintage disclosures — line-of-credit arrangements converted to term loans.
  • Contractual extensions and renewals.

Comments on the proposed ASU are due by December 19, 2018.

For more in­for­ma­tion, see the press release and proposed ASU on the FASB’s Web site.

On November 27, 2018, the FASB issued for comment Proposed Accounting Standards Update, Codification Improvements — Financial Instruments. Comments on the proposed taxonomy improvements are due by December 26, 2018.

AICPA releases working draft on inventory valuation guidance

Nov 20, 2018

The AICPA’s Financial Reporting Executive Committee has released for public comment a working draft on fair value of inventory acquired in a business combination under ASC 820, “Fair Value Measurement.”

The working draft, Inventory Valuation Guidance, will be part of the upcoming Ac­count­ing and Au­dit­ing Guide, Business Combinations.

Com­ments on the working draft are due by February 1, 2019. For more in­for­ma­tion, see the press release on the AICPA’s Web site.

SEC posts drafts of EDGAR Filer Manual for upcoming EDGAR release

Nov 19, 2018

The SEC has issued drafts of Volumes I, II, and certain technical specifications of its Electronic Data Gathering, Analysis, and Retrieval System (EDGAR) Filer Manual for upcoming EDGAR Release 18.4.

The new release is sched­uled for im­ple­men­ta­tion on December 17, 2018. The drafts have not been ap­proved by the Com­mis­sion and are subject to change. The final version of the EDGAR Filer Manual will be posted on the SEC’s Web site once it has been ap­proved.

For more in­for­ma­tion, see the fol­low­ing on the SEC’s Web site:

FEI publishes guides on ICFR considerations related to leasing and CECL standards

Nov 19, 2018

Financial Executives International (FEI) has published guides on ICFR considerations related to the FASB’s leasing and current expected credit loss (CECL) standards.

The purpose of the guides is to “provide a support mechanism to help companies of varying sizes execute successful implementation and maintenance of effective ICFR for these new standards.”

The leasing and CECL guides are available on FEI’s Web site.

SEC issues statement on digital asset securities issuance and trading

Nov 19, 2018

The SEC’s Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets have issued a statement on the application of technological innovations in the securities market.

The statement notes that although “technological innovations that benefit investors and capital markets” are encouraged, “market participants must still adhere to our well-established and well-functioning federal securities law framework.” In addition, the statement highlights several enforcement actions involving the applications of federal securities laws and new technologies.

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

Highlights of the FASB’s November 14 meeting

Nov 15, 2018

At its November 14, 2018, meeting, the FASB discussed its projects on (1) nonemployee share-based payments, (2) disclosures by business entities about government assistance, and (3) disclosure framework review — income taxes. In addition, the staff and Board discussed the financial reporting effects of the Tax Cuts and Jobs Act, and the Board made an agenda request.

Codification improvements — nonemployee share-based payments

The Board dis­cussed proposed modifications to ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, and made tentative decisions related to transition and its cost-benefit analysis. In addition, the Board decided to add a project to clarify the guidance on share-based payments made as consideration payable to a customer. The Board directed its staff to begin drafting 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.

Disclosures by business entities about government assistance

The Board dis­cussed its proposed ASU Disclosures by Business Entities About Government Assistance and made tentative decisions related to the scope, application, and effective date of the proposed amendments. The Board directed its staff to begin drafting a final ASU.

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

Disclosure framework: disclosure review — income taxes

The Board dis­cussed its pro­posed ASU Disclosure Framework — Changes to the Disclosure Requirements for Income Taxes and made tentative decisions related to:

  • Potential new disclosures as a result of the Tax Cuts and Jobs Act.
  • Changes in tax law.
  • Disaggregation of pretax income (or loss) from continuing operations, income tax expense (or benefit), and income taxes paid.
  • Indefinitely reinvested foreign earnings.
  • Cash, cash equivalents, and marketable securities.
  • Unrecognized tax benefits.
  • Valuation allowances.
  • Effective tax rate reconciliation.
  • Carryforward disclosures for public business entities and entities other than public business entities.
  • Interim cash taxes paid.

The Board di­rected its staff to begin draft­ing a proposed ASU on the decisions made, other than those on disclosures.

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

Financial reporting effects of the Tax Cuts and Jobs Act

The staff gave the Board  an update on monitoring effects related to the financial reporting implications of tax reform.

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

Agenda request

The Board tentatively decided to amend ASU 2016-13 to allow entities to irrevocably elect, upon adoption of ASU 2016-13, the fair value option for financial instruments that were previously recorded at amortized cost and that are within the scope of ASC 326-20 if the instruments are eligible for the fair value option under ASC 825-10. An entity would make this election on an instrument-by-instrument basis. The Board di­rected its staff to begin draft­ing 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.

FASB makes narrow-scope amendments to guidance on credit losses

Nov 15, 2018

The FASB has issued Accounting Standards Update (ASU) No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments — Credit Losses.”

For entities other than public business entities, ASU 2018-19 changes the effective date of the Board’s credit losses standard (ASU 2016-13) to fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Thus, the effective date for such entities’ annual financial statements is now aligned with that for their interim financial statements. Further, the ASU clarifies that operating lease receivables are not within the scope of ASC 326-20 and should instead be accounted for under the new leasing standard, ASC 842.

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

SBAC holds November 2018 meeting

Nov 15, 2018

At its November 8, 2018, meeting, the Small Business Advisory Committee (SBAC) discussed certain identifiable intangible assets, goodwill, liabilities from equity, consolidation, and implementation of leases. The SBAC also held an open discussion on considerations related to small public companies.

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

Correction list for hyphenation

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