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2019

AICPA releases working drafts on implementation issues related to credit losses

Aug 19, 2019

The AICPA’s Financial Reporting Executive Committee has released for public comment three working drafts on accounting issues associated with the implementation of FASB Accounting Standards Update No. 2016-13, “Financial Instruments — Credit Losses” (issued in June 2016), which “provides a new current expected credit loss (CECL) model to measure impairment for financial assets (and instruments) measured at amortized cost.”

The working drafts address the following topics:

Com­ments on the working draft are due by October 15, 2019. For more in­for­ma­tion, see the CECL issues page on the AICPA’s Web site.

OCC updates “Bank Accounting Advisory Series”

Aug 16, 2019

The Office of the Comptroller of the Currency (OCC) has updated its “Bank Accounting Advisory Series” (BAAS), which “expresses the office’s positions on accounting topics relevant to national banks and federal savings associations.”

Changes to the BAAS include re­vi­sions made to reflect guidance in the FASB’s standards on hedging and credit losses.

For more in­for­ma­tion, see the BAAS update on the OCC’s Web site.

GASB issues implementation guide on lease accounting

Aug 16, 2019

The GASB has issued an implementation guide containing Q&As on lease accounting.

The guide’s purpose is to help state and local governmental entities better understand the requirements in GASB Statement No. 87, Leases.

For more in­for­ma­tion, see the press release and im­ple­men­ta­tion guide on the GASB’s Web site.

FASB proposes to delay certain effective dates for private companies, NFPs, and small public companies

Aug 15, 2019

The FASB has issued a proposed Accounting Standards Update (ASU), “Effective Dates,” which would give private companies, not-for-profit (NFP) entities, and certain small public companies additional time to implement the Board’s standards on current expected credit losses (CECL), hedging, and leases.

On the basis of input from the Private Company Council and Small Business Advisory Committee, the FASB has outlined a new philosophy under which it plans to extend and simplify effective dates for private companies, smaller public companies, NFPs, and employee benefit plans. In its press release on the proposal, the Board explains this philosophy as follows:

Under this philosophy, a major standard would first be effective for larger public companies. For all other entities, the Board would consider requiring an effective date staggered at least two years later. Generally, it is expected that early application would continue to be permitted for all entities.

The table below, which is adapted from the proposed ASU, indicates how the effective dates of the hedging, leasing, and CECL standards would be amended for affected entities (in this table, a calendar year-end is assumed).

Standard SEC filers All other public business entities Private and all other
Hedging January 2019 January 2019 January 2020
January 2021
Leases January 2019 January 2019* January 2020
January 2021
CECL January 2020
(Except SRCs
January 2023)
January 2021
January 2023
January 2022
January 2023

Bold indicates no change in effective date.

* Also includes employee benefit plans and not-for-profit conduit bond obligors that file or furnish financial statements with or to the SEC.

Comments on the proposed ASU are due by September 16, 2019. For more information, see Deloitte's related Heads Up newsletter as well as the proposal and FASB in Focus newsletter on the FASB’s Web site.

SEC proposes modernizing certain disclosure requirements in Regulation S-K

Aug 08, 2019

The SEC has issued a proposed rule, “Modernization of Regulation S-K Items 101, 103, and 105.”

The proposed rule would “modernize the description of business, legal proceedings, and risk factor disclosures that registrants are required to make pursuant to Regulation S-K.”

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

SEC amends rules for NRSROs

Aug 07, 2019

The SEC has issued a final rule, “Amendments to Rules for Nationally Recognized Statistical Rating Organizations.”

The final rule codifies “an existing exemption [to Exchange Act Rule 17g-5(a)(3)] for credit rating agencies registered with the Commission as nationally recognized statistical rating organizations (NRSROs).” The exemption applies to “certain structured finance products issued by non-U.S. persons and offered and sold outside the United States.”

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

SEC makes technical corrections related to certain disclosure rules in Regulation S-K

Aug 07, 2019

The SEC has issued a final rule, “FAST Act Modernization and Simplification of Regulation S-K; Correction.”

The final rule makes technical corrections related to:

  • Certain registration statement forms under the Securities Act of 1933.
  • The exhibit table in Regulation S-K, Item 601(a).
  • Typographical errors and cross-references in the regulatory text of the amendments.

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

Highlights of the FASB’s July 31 meeting

Aug 02, 2019

At its July 31, 2019, meeting, the FASB discussed (1) share-based consideration payable to a customer, (2) measurement and other topics related to revenue contracts with customers under ASC 805, (3) balance sheet classification of debt, and (4) hedge accounting.

Codification improvements — Share-based consideration payable to a customer

The Board discussed feedback on its proposed Accounting Standards Update (ASU), Codification Improvements — Share-Based Consideration Payable to a Customer, and reaffirmed its decision to require entities to measure and classify share-based consideration payable to a customer by applying the guidance in ASC 718. The Board di­rected its staff to begin draft­ing a final ASU for a vote by written ballot.

For more in­for­ma­tion, see Deloitte related journal entry as well as the meeting minutes on the FASB’s Web site.

Measurement and other topics related to revenue contracts with customers under ASC 805

The Board discussed feedback on its Invitation to Comment, Measurement and Other Topics Related to Revenue Contracts With Customers Under Topic 805, and EITF Issue No. 18-A, “Recognition Under Topic 805 for an Assumed Liability in a Revenue Contract.” The Board tentatively decided to “subsume Issue 18-A . . . into the Board’s research project on measurement and other topics related to revenue contracts in a business combination.” It also tentatively decided “not to eliminate  any of the potential alternatives identified by the staff on measurement and other topics related to an assumed liability from a revenue contract in a business combination.”

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

Simplifying the Balance Sheet Classification of Debt

The Board dis­cussed its proposed ASU, Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent), and made tentative decisions related to the debt classification principle, variable-rate demand obligations with remarketing agreements, grace-period disclosures, and the definition of “current liabilities.”

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

Codification Improvements — Hedge Accounting

The Board discussed its proposed ASU on Codification improvements to hedge accounting and made tentative decisions related to hedged risk in a cash flow hedge, contractually specified components, private-company considerations, and the effective date of the proposed amendments. The Board directed its staff to draft a proposed ASU with a 60-day comment period for a vote by written ballot.

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

IASB publishes proposed amendments to IAS 1 and IFRS Practice Statement 2

Aug 01, 2019

The International Accounting Standards Board (IASB) has published an exposure draft (ED), “Disclosure of Accounting Policies.”

The proposed amend­ments are intended to help preparers determine which accounting policies are material and therefore must be disclosed in their financial state­ments. The ED would also add explanations and examples of the application of the four-step materiality process described in IFRS Practice Statement 2, Making Materiality Judgements.

Comments on the ED are due by November 29, 2019. 

 For more information, see the press release and ED on the IASB’s Web site.

FASB proposes improvements to guidance on convertible instruments and the derivatives scope exception

Jul 31, 2019

The FASB has issued a proposed Accounting Standards Update (ASU), “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.”

As the FASB’s press release notes, the proposed ASU “would reduce the number of accounting models for convertible debt instruments and convertible preferred stock. It would revise the derivatives scope exception guidance to reduce form-over-substance-based accounting conclusions driven by remote contingent events. The proposed ASU also would improve and amend the related disclosure and earnings-per-share guidance.”

Comments on the proposed ASU are due by October 14, 2019. For more information, see the press release and FASB in Focus newsletter on the FASB’s Web site.

 

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