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FASB’s Investor Advisory Committee holds November 2019 meeting

Nov 20, 2019

The FASB’s Investor Advisory Committee (IAC) met on November 12, 2019.

Topics dis­cussed at the meeting include IAC emerg­ing issues and trends, accounting for revenue contracts in a business combination, contract modifications of licenses of intellectual property, disclosure framework — interim reporting, reference rate reform, and financial performance reporting — disaggregation.

The next IAC meeting is sched­uled for May 14, 2020. For more in­for­ma­tion, see the meeting recap on the FASB’s Web site.

PCAOB approves its 2020 budget and 2019–2023 strategic plan

Nov 20, 2019

The PCAOB has approved its budget for fiscal year 2020 and strategic plan for 2019–2023.

The budget includes funding for “investments in personnel, processes, and technology, and will provide the Board with the resources necessary to continue to make progress toward implementing its strategic plan.”

The five-year strategic plan “guides the PCAOB’s programs and operations and serves as the foundation for the budget.” Spe­cific ob­jec­tives of the plan include:

  • Im­prov­ing “the quality of audit ser­vices through a com­bi­na­tion of pre­ven­tion, de­tec­tion, de­ter­rence, and re­me­di­a­tion.”
  • An­tic­i­pat­ing and re­spond­ing to “the chang­ing en­vi­ron­ment, in­clud­ing emerg­ing tech­nolo­gies and related risks and op­por­tu­ni­ties.”
  • En­hanc­ing “trans­parency and ac­ces­si­bil­ity through proac­tive stake­holder en­gage­ment.”
  • Pur­su­ing “op­er­a­tional ex­cel­lence through ef­fi­cient and ef­fec­tive use of . . . re­sources, in­for­ma­tion, and tech­nol­ogy.”

The budget is subject to approval by the SEC at its December 18, 2019, meeting.

For more in­for­ma­tion, see the press release and 2019–2023 strate­gic plan on the PCAOB’s Web site.

FASB issues ASUs to defer effective dates of certain major standards

Nov 15, 2019

The FASB has issued Accounting Standards Updates (ASUs) 2019-09 and 2019-10, which delay certain effective dates of four major standards.

ASU 2019-09 gives all insurance entities that issue long-duration insurance contracts (e.g., life insurance and annuities) additional time to implement ASU 2018-12 (codified in ASC 944).

ASU 2019-10 gives private companies, not-for-profit entities, and certain small public companies additional time to implement the Board’s standards on current expected credit losses (ASC 326), derivatives and hedging (ASC 815), and leases (ASC 842).

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

Highlights of the FASB’s November 13 meeting

Nov 15, 2019

At its November 13, 2019, meeting, the FASB discussed (1) the measurement and elements phases of its conceptual framework project and (2) reference rate reform.

Conceptual framework — measurement

The Board discussed the potential issuance of an invitation to comment (ITC) on the measurement chapter of the conceptual framework. Although the Board did not make any official decisions on this matter at the meeting, it directed the staff to begin work on the ITC and indicated that it would provide its input as part of the drafting process.

For more in­for­ma­tion, see the tentative Board decisions on the FASB’s Web site.

Conceptual framework — elements

The Board made tentative decisions related to the definitions of the terms “equity” (net assets), “owner,” and “comprehensive income.” In addition, the Board tentatively decided that a future concepts statement should be consistent with the amendments in Accounting Standards Update (ASU) No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities.

For more in­for­ma­tion, see the tentative Board decisions on the FASB’s Web site.

Reference rate reform — facilitation of the effects of the interbank offered rate transition on financial reporting

The Board discussed feedback on its proposed ASU Facilitation of the Effects of Reference Rate Reform on Financial Reporting and tentatively decided to provide “temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting.” The FASB directed its staff to draft a final ASU for a vote by written ballot.

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

FASB proposes improvements to hedge accounting

Nov 12, 2019

The FASB has issued a proposed Accounting Standards Update (ASU), “Codification Improvements to Hedge Accounting.”

The pro­posed ASU would clarify certain aspects of the Board’s new hedging standard, ASU 2017-12, including (1) changes in hedged risk in a cash flow hedge, (2) contractually specified components in cash flow hedges of nonfinancial forecasted transactions, (3) foreign-currency-denominated debt instruments designated as hedging instruments and hedged items, and (4) using the term “prepayable” under the shortcut method. According to FASB Chairman Russ Golden, the purpose of the proposed ASU is to “promote . . . better, more consistent application” of the hedging standard by better aligning certain aspects of the standard with its “stated objectives.”

Com­ments on the pro­posed ASU are due by January 13, 2020. For more in­for­ma­tion, see the press release and FASB in Focus newslet­ter on the FASB’s Web site.

On November 13, 2019, the FASB issued for comment Proposed Taxonomy Improvements for Proposed Accounting Standards Update, Derivatives and Hedging (Topic 815): Codification Improvements to Hedge Accounting. Comments on the proposed taxonomy improvements are due by January 13, 2020.

FASB issues guidance on share-based payments made to customers

Nov 11, 2019

The FASB has issued Accounting Standards Update (ASU) No. 2019-08, “Codification Improvements — Share-Based Consideration Payable to a Customer.”

The ASU clarifies the accounting for share-based payments issued as consideration payable to a customer under ASC 606. Under the ASU, entities are required to apply the guidance in ASC 718 to measure and classify share-based payments issued to a customer that are not in exchange for a distinct good or service (i.e., share-based sales incentives).

For more in­for­ma­tion, see Deloitte's related Heads Up newsletter as well as the press release and ASU on the FASB’s Web site.

EITF discusses two Issues at November meeting

Nov 08, 2019

At its meeting yesterday, the EITF discussed (1) the interaction between ASC 321 and ASC 323 and (2) contract modifications of licenses of intellectual property.

Specif­i­cally, the EITF dis­cussed the fol­low­ing Issues:

  • Issue 19-A, “Fi­nan­cial In­stru­ments — Clar­i­fy­ing the In­ter­ac­tion Between Topic 321 and Topic 323.”
  • Issue 19-B, “Revenue Recog­ni­tion — Con­tract Mod­i­fi­ca­tions of Li­censes of In­tel­lec­tual Prop­erty.”

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

FASB discusses not-for-profit reporting of gifts-in-kind

Nov 07, 2019

At its November 6, 2019, meeting, the FASB discussed its project on not-for-profit reporting of gifts-in-kind.

The Board made tentative decisions about the project’s scope, as well as about presentation, disclosure, and transition.

The FASB di­rected its staff to begin draft­ing a proposed ASU for a vote by written ballot.

For more in­for­ma­tion, see the tentative Board decisions on the FASB’s Web site.

FASB appoints new EITF member

Nov 07, 2019

The FASB has appointed Aleks Zabreyko as an EITF member.

Mr. Zabreyko joins the EITF from Connor Group, where he currently serves as partner and strategic markets leader.

Mr. Zabreyko’s term is effective immediately.

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

CAQ and Audit Analytics issue report on audit committee transparency

Nov 06, 2019

The Center for Audit Quality (CAQ) and Audit Analytics have issued the 2019 edition of “Audit Committee Transparency Barometer.”

The publication an­a­lyzes “how public company audit com­mit­tees approach the public communication of their external auditor over­sight ac­tiv­i­ties.” In ad­di­tion, the report provides statistics on disclosure trends, including those related to cybersecurity, as well as examples of effective disclosures provided by S&P 1500 companies in filings between July 1, 2018, and June 30, 2019.

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

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