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2018

FASB proposes enhancements to the accounting for episodic television series

Nov 07, 2018

The FASB has issued a proposed Accounting Standards Update (ASU), “Improvements to Accounting for Costs of Films and License Agreements for Program Materials,” in response to the EITF’s consensus-for-exposure on Issue 18-B.

The pro­posed ASU would “align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization” and would require entities to “reassess estimates of the use of a film for a film in a film group and account for any changes prospectively.”

Com­ments on the pro­posed ASU are due by December 7, 2018. For more in­for­ma­tion, see the press release and pro­posed ASU on the FASB’s Web site.

On November 8, 2018, the FASB issued for comment Proposed Taxonomy Improvements related to this proposed ASU. Comments on the proposed taxonomy improvements are due by December 7, 2018.

FASB issues guidance on collaborative arrangements

Nov 05, 2018

The FASB has issued Accounting Standards Update (ASU) No. 2018-18, “Clarifying the Interaction Between Topic 808 and Topic 606.”

The ASU amends ASC 808 to:

  • Clarify that in the context of the unit of account, ASC 606 should apply in its entirety to certain transactions between collaborative arrangement participants.
  • Add “unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606.”
  • Clarify that when a transaction is not directly related to sales to third parties, presentation of the transaction as revenue would be precluded if the collaborative participant counterparty is not a customer.

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

FASB issues staff paper related to implementation of the revenue recognition standard by private-company franchisors

Nov 05, 2018

The FASB has issued an educational staff paper containing examples designed to assist private-company franchisors with implementing the new revenue standard (ASC 606). One of the main topics addressed in the staff paper is the judgment a franchisor uses in identifying performance obligations.

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

SEC enhances disclosures related to broker-dealer order handling

Nov 05, 2018

The SEC has issued a final rule, “Disclosure of Order Handling Information.”

Among other requirements, the final rule amends Rule 606 of Regulation NMS to “require additional disclosures by broker-dealers to customers regarding the handling of their orders.”

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

FASB discusses lessor accounting

Nov 01, 2018

At its October 31, 2018, meeting, the FASB discussed its project on narrow-scope improvements to lessor accounting.

The Board made tentative decisions related to (1) sales taxes and other similar taxes collected from lessees, (2) lessor costs, (3) recognition of variable payments for contracts with lease and nonlease components, (4) transition and effective date, and (5) cost/benefit analysis. In addition, the Board directed its staff to begin drafting a final 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.

SEC issues statement on certain provisions of business conduct standards for security-based swap dealers and major security-based participants

Nov 01, 2018

The SEC has issued “Commission Statement on Certain Provisions of Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants.”

The statement provides the Commission’s position, “for a limited time period, that certain actions with respect to specific provisions of the SEC’s business conduct standards for security-based swap dealers and major security-based swap participants will not provide a basis for a Commission enforcement action.”

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

SEC amends property disclosure requirements for mining registrants

Nov 01, 2018

The SEC has issued a final rule, “Modernization of Property Disclosures for Mining Registrants.”

The final rule aligns the property disclosure requirements for mining registrants and related guidance with current industry and global regulatory practices and standards. The amendments are designed to help investors “make more informed investment decisions”  about registrants’ mining properties.

The SEC has adopted a “two-year transition period so that a registrant will not begin to comply with the new rules until its first fiscal year beginning on or after Jan. 1, 2021.” 

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

FASB improves consolidation guidance

Oct 31, 2018

The FASB has issued Accounting Standards Update (ASU) No. 2018-17, “Targeted Improvements to Related Party Guidance for Variable Interest Entities,” to reduce the cost and complexity of financial reporting associated with consolidation of variable interest entities.

Specif­i­cally, under the ASU:

  • Private com­pa­nies may “elect not to apply VIE guidance to legal entities under common control (including common control leasing arrangements) if both the parent and the legal entity being evaluated for consolidation are not public business entities.”
  • “Indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.”

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

SEC proposes enhancements to disclosure requirements for variable annuities and variable life insurance contracts

Oct 31, 2018

The SEC has issued a proposed rule, “Updated Disclosure Requirements and Summary Prospectus for Variable Annuity and Variable Life Insurance Contracts.”

The purpose of the proposal is to improve disclosures about variable annuities and variable life insurance contracts by providing “investors with key information relating to the contract’s terms, benefits, and risks in a concise and more reader-friendly presentation, with access to more detailed information available online and electronically or in paper format on request.”

Com­ments on the pro­posed rule are due by February 15, 2019. For more in­for­ma­tion, see the press release and pro­posed rule on the SEC’s Web site.

IASB amends the definition of materiality

Oct 31, 2018

The IASB has amended IAS 1 and IAS 8 to clarify the definition of “material” and to align the definition used in the Conceptual Framework with that in the standards themselves.

Specifically, the amendments define the term “material” as follows:

In­for­ma­tion is material if omitting, mis­stat­ing or obscuring it could rea­son­ably be expected to influence decisions that the primary users of general purpose financial state­ments make on the basis of those financial state­ments, which provide financial in­for­ma­tion about a specific reporting entity.

Notable aspects of the new de­f­i­n­i­tion include:

  • Obscuring — The previous de­f­i­n­i­tion only focused on omitting or mis­stat­ing in­for­ma­tion; however, the Board concluded that obscuring material in­for­ma­tion with in­for­ma­tion that can be omitted can have a similar effect. Although the term “obscuring” is new to this de­f­i­n­i­tion, it was already included in IAS 1 (paragraph 30A).
  • Could rea­son­ably be expected to influence The previous de­f­i­n­i­tion referred to “could influence,” which the Board believed might result in too much in­for­ma­tion because almost anything could influence a user’s decisions even if the pos­si­bil­ity is remote.
  • Primary users The previous de­f­i­n­i­tion referred only to “users,” which the Board feared might be too broad.

The amend­ments are effective for annual reporting periods beginning on or after January 1, 2020. Earlier ap­pli­ca­tion is permitted.

For more information, see press release on the IASB's Web site. Also see Deloitte's IAS Plus Web site for overview and materiality project pages related to the IASB's disclosure initiative.

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