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2018

SEC issues report on implementing internal accounting controls for cyber threats

Oct 16, 2018

The SEC has issued “Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934 Regarding Certain Cyber-Related Frauds Perpetrated Against Public Companies and Related Internal Accounting Controls Requirement.”

The report focuses on issuers’ compliance with the requirements of Sections 13(b)(2)(B)(i) and (iii) of the Securities Exchange Act of 1934, under which certain issuers must “devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that transactions are executed with, or that access to company assets is permitted only with, management’s general or specific authorization.” Specifically, the report investigates nine issuers who fell victim to cyber scams, such as e-mails from fake executives or fake vendors.

The report provides the following key considerations related to implementing internal accounting controls for cyber threats:

  • “Internal accounting controls may need to be reassessed in light of emerging risks, including risks arising from cyber-related frauds.”
  • “Public issuers subject to the requirements of Section 13(b)(2)(B) must calibrate their internal accounting controls to the current risk environment and assess and adjust policies and procedures accordingly.”
  • “Given the prevalence and continued expansion of these attacks, issuers should be mindful of the risks that cyber-related frauds pose and consider, as appropriate, whether their internal accounting control systems are sufficient to provide reasonable assurances in safeguarding their assets from these risks.”

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

FASAB issues proposal on materiality

Oct 16, 2018

The Federal Accounting Standards Advisory Board (FASAB) has issued a proposed Statement of Federal Financial Accounting Concepts (SFFAC), “Materiality.”

The proposed SFFAC would clarify “concepts regarding the application of materiality in the federal financial reporting environment.” Specifically, the proposal would “(1) provide materiality concepts, (2) specify the scope of materiality, and (3) list factors to consider when applying materiality.”

Comments on the proposed SFFAC are due by January 23, 2019. For more information, see the press release and proposed SFFAC on the FASAB’s Web site.

FASB staff proposes taxonomy implementation guide on credit losses and taxonomy improvements related to its proposal on classification of debt in a classified balance sheet

Oct 12, 2018

The FASB staff has issued a proposed financial reporting taxonomy implementation guide, “Financing Receivable and Current Expected Credit Loss Disclosures,” and proposed taxonomy improvements related to the proposed Accounting Standards Update (ASU), “Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent).”

The pro­posed credit loss im­ple­men­ta­tion guide pro­vides “examples to help users of the Taxonomy understand how the modeling for disclosures related to financing receivables and credit losses is structured within the Taxonomy.”

Com­ments on the pro­posed im­ple­men­ta­tion guide are due by November 5, 2018. Com­ments on the pro­posed tax­on­omy im­prove­ments related to the pro­posed ASU are due by November 12, 2018.

SEC issues 2018−2022 strategic plan

Oct 11, 2018

The SEC has issued its strategic plan for fiscal years 2018−2022. The plan outlines the Commission’s mission, vision, values, strategic goals, and objectives.

In par­tic­u­lar, the plan defines and spec­i­fies how the SEC plans to meet three strate­gic goals:

    1. “Focus on the long-term in­ter­ests of our Main Street in­vestors.”
    2. “Rec­og­nize sig­nif­i­cant de­vel­op­ments and trends in our evolv­ing capital markets and adjust our efforts to ensure we are ef­fec­tively al­lo­cat­ing our re­sources.”
    3. “Elevate the SEC’s per­for­mance by en­hanc­ing our an­a­lyt­i­cal ca­pa­bil­i­ties and human capital de­vel­op­ment.”

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

FASB ratifies EITF consensuses-for-exposure

Oct 11, 2018

At its October 10, 2018, meeting, the FASB ratified the Emerging Issues Task Force (EITF) consensuses-for-exposure on Issues 18-A, “Recognition Under Topic 805 for an Assumed Liability in a Revenue Contract,” and 18-B, “Improvements to Accounting for Episodic Television Series,” and directed its staff to draft a proposed ASU on each issue for public comment.

In addition, the Board directed its staff to prepare a discussion paper to solicit feedback on measurements and other topics related to Issue 18-A.

For more in­for­ma­tion, see De­loitte’s EITF Snap­shot as well as the meeting minutes on the FASB's Web site.

Highlights of the September 2018 FASAC meeting

Oct 03, 2018

At its September 25, 2018, meeting, the FASB’s Financial Accounting Standards Advisory Council (FASAC) discussed (1) tax reform and income tax disclosures, (2) the SEC’s disclosure update and simplification, and (3) accounting and reporting alternatives within GAAP.

Tax reform and income tax disclosures

The FASAC discussed the relevancy of certain disclosures in GAAP and the FASB’s proposed ASU Disclosure Framework — Changes to Disclosure Requirements for Income Taxes. In addition, the council decided that disclosures required by provisions in the Tax Cuts and Jobs Act are unnecessary.

SEC’s disclosure update and simplification

FASAC members asked the FASB to conduct preagenda research on:

1. Whether specific disclosures should be incorporated into GAAP
2. Which organizations should be required to provide the disclosures (public companies only, all organizations, certain sized organizations, or some other combination), and
3. The expected costs and benefits.
4. Some FASAC members indicated their preference to have the financial statement disclosure requirements in one place to promote consistency and uniformity.

Accounting and reporting alternatives within GAAP

The FASAC dis­cussed transition and effective date alternatives for recently issued guidance.

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

SEC updates EDGAR filer manual and technical specifications

Oct 02, 2018

The SEC has implemented Release 18.3 of its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system filer manual.

The release updates volumes I and II of EDGAR as well as various technical specifications.

For more information, see Deloitte's related journal entry as well as the announcement and final rule on the SEC’s Web site.

GASB issues two preliminary views documents

Sep 28, 2018

The GASB has issued for public comment preliminary views documents on (1) improvements to the financial reporting model and (2) recognition of elements in financial statements.

Preliminary views on improvements to the financial reporting model

This document would improve the effectiveness of the financial reporting model by “providing information essential to decision making and assessing a government’s accountability.” The Board plans to issue a subsequent proposal that would enhance other aspects of the financial reporting model.

Preliminary views on recognition of elements in financial statements

This document proposes (1) “that an item being considered for recognition in financial statements would be evaluated using a hierarchy for recognition of elements” and (2) “a recognition framework for both short-term financial resources measurement focus . . . and the economic resources measurement focus.”

Next steps

Comments on both preliminary views documents are due by February 15, 2019. In addition, the GASB will hold public hearings and user forums on the preliminary views in March 2019. See the press release on the GASB’s Web site for more information.

EITF discusses two Issues at September meeting

Sep 28, 2018

At its meeting yesterday, the EITF discussed assumed liabilities in revenue contracts and accounting for episodic television series.

Specifically, the EITF discussed the following Issues:

  • Issue 18-A, “Recognition Under Topic 805 for an Assumed Liability in a Revenue Contract.”
  • Issue 18-B, “Improvements to Accounting for Episodic Television Series.”

For a detailed summary of the meeting, see Deloitte’s September EITF Snapshot as well as the meeting recap on the FASB's Web site.

 

Highlights of the FASB’s September 26 meeting

Sep 27, 2018

At its September 26, 2018, meeting, the FASB discussed its project on updating the definition of collections and announced that it would be conducting preagenda research on hedging.

The Board discussed feedback received on its proposed ASU, Updating the Definition of Collections, and began redeliberations. The FASB directed its staff to conduct further research on direct care.

During the open discussion, Chairman Russ Golden asked the staff to conduct preagenda research on potential hedge accounting issues that are broader than the amendments made in ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. 

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

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