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2019

PCAOB issues staff guidance on auditing estimates and the work of specialists

Aug 23, 2019

The PCAOB has issued four staff guidance documents on the Board’s new requirements related to auditing estimates and the work of specialists, which are effective for financial statement audits for fiscal years ending after December 15, 2020.

The staff guidance highlights “aspects of the new standard and enhancements made to integrate the Board’s risk assessment requirements when auditing accounting estimates, including fair value measurements . . . [and] aspects of new requirements that apply when auditors use the work of specialists in an audit and when an auditor uses the work of a company specialist as audit evidence.”

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

Highlights of the FASB’s August 21 meeting

Aug 22, 2019

At its August 21, 2019, meeting, the FASB discussed (1) hedging — last-of-layer method and (2) reporting of gifts-in-kind by not-for-profit entities.

Hedging — Last-of-layer method

During this educational session, the Board discussed issues related to accounting for basis adjustments and multiple-layer hedging strategies under the last-of-layer method. No decisions were made.

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

Reporting of gifts-in-kind by not-for-profit entities

The Board decided to add a project to its technical agenda to address the presentation and valuation of gifts-in-kind (GIKs) received by not-for-profit organizations. The project aims “to provide additional transparency in the reporting of GIKs through potential enhancements to presentation and disclosure.”

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

 

FASB proposes to defer effective date for standard on long-duration insurance contracts

Aug 22, 2019

The FASB has issued a proposed Accounting Standards Update (ASU), “Financial Services — Insurance (Topic 944): Effective Date,” which would give insurance companies additional time to implement the Board’s August 2018 standard on long-duration contracts, ASU 2018-12.

The proposed ASU states the following regarding how entities would be affected by the deferral:

For SEC filers, excluding entities eligible to be [smaller reporting companies] as defined by the SEC, the amendments in Update 2018-12 would be effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. . . . Early application of the amendments in Update 2018-12 would be permitted.

For all other entities, the amendments in Update 2018-12 would be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early application of the amendments in Update 2018-12 would be permitted.

The proposed deferral is consistent with the FASB’s new philosophy to stagger the effective dates of major standards so that the standards are effective for larger public companies at least two years before they are effective for all other entities.

Comments on the proposed ASU are due by September 20, 2019. For more information, see the proposal and press release on the FASB’s Web site.

SEC clarifies investment advisers’ proxy voting responsibilities

Aug 22, 2019

The SEC has issued “Commission Interpretation and Guidance Regarding the Applicability of the Proxy Rules to Proxy Voting Advice.”

The guidance addresses “the ability of investment advisers to establish a variety of different voting arrangements with their clients and matters they should consider when they use the services of a proxy advisory firm.”

The guidance will become effective upon the date of its publication in the Federal Register. For more information, see the press release and guidance on the SEC’s Web site.

SEC staff publishes C&DIs on interactive data

Aug 21, 2019

The staff in the SEC’s Division of Corporation Finance (the “Division”) has updated its compliance and disclosure interpretations (C&DIs) related to interactive data.

Specifically, the Division added nine C&DIs addressing inline XBRL.

For more in­for­ma­tion, see the C&DIs on the SEC’s Web site.

Michael Morrow appointed as FASAC chairman

Aug 21, 2019

The Financial Accounting Foundation (FAF) has announced that Michael Morrow has been appointed as chairman of the Financial Accounting Standards Advisory Council (FASAC) for a two-year term beginning on January 1, 2020.

Mr. Morrow joined the FASAC in January 2019. He will replace Andrew G. McMaster Jr. as chairman, who is stepping down at the end of the year.

For ad­di­tional in­for­ma­tion, see the press release on the FAF's Web site.

FAF trustees announce new and reappointed PCC members

Aug 21, 2019

The Financial Accounting Foundation’s (FAF’s) board of trustees has appointed Holly Nelson and Zubin Avari to the Private Company Council (PCC). The trustees have also announced the reappointments of current PCC members Yan Zhang and Richard Reisig.

The three-year terms of both the new and reappointed PCC members will begin on January 1, 2020. For more in­for­ma­tion, see the press release on the FAF’s Web site.

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.

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