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News

FASB document Image

FASB issues proposal and invitation to comment on the recognition and measurement of deferred revenue in business combinations

Feb 14, 2019

The FASB has issued a proposed Accounting Standards Update (ASU), “Business Combinations (Topic 805): Revenue From Contracts With Customers — Recognizing an Assumed Liability (a consensus of the FASB Emerging Issues Task Force),” and an Invitation to Comment (ITC), “Measurement and Other Topics Related to Revenue Contracts With Customers Under Topic 805.”

The pro­posed ASU would “require that an entity (acquirer) recognize a liability assumed in a business combination from a contract with a customer if that liability represents an unsatisfied performance obligation under Topic 606 for which the acquiree has received consideration (or the amount is due) from the customer.”

The ITC was issued to obtain feedback from stakeholders on “payment terms and their effect on the subsequent revenue recognized” and “the costs to fulfill a performance obligation in measuring the fair value of a contract liability for a revenue contract under Topic 805.”

Com­ments on the pro­posed ASU and ITC are due by April 30, 2019. For more in­for­ma­tion, see the press release, pro­posed ASU, and ITC on the FASB’s Web site.

FASB meeting Image

Highlights of the FASB’s February 13 meeting

Feb 14, 2019

At its February 13, 2019, meeting, the FASB discussed its projects on (1) distinguishing liabilities from equity, (2) segment reporting, and (3) codification improvements related to leases.

Distinguishing liabilities from equity (including convertible debt)

The Board made tentative decisions related to the application of the derivatives scope exception to contracts on an entity’s own equity, earnings per share for convertible instruments, and disclosures.  

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

Segment reporting

The Board discussed “an analysis of options to potentially improve how the management approach applies to the segment disclosure requirements” and directed its staff to “study how clarifying the meaning of regularly reviewed segment information would affect the pieces of information public entities report by segment.”

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

Codification improvements related to leases

The Board completed redeliberations of its proposed ASU Codification Improvements for Lessors. It made decisions related to several issues, including (1) determining the fair value of an underlying asset if a lessor is not a manufacturer or dealer and (2) the presentation in the statement of cash flows of sales-type and direct financing leases by lessors that are within the scope of ASC 942. The Board directed its staff to draft a final ASU for a vote by written ballot.

In addition, the Board deliberated certain issues unrelated to the proposed ASU that were raised in comment letters. It decided to clarify that entities that adopt ASC 842 do not need to provide the interim-period disclosures required by ASC 250-10-50-3.

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

SEC (US Securities and Exchange Commission) Image

SEC posts drafts of EDGAR Filer Manual for upcoming EDGAR release

Feb 13, 2019

The SEC has issued drafts of Volume II and certain technical specifications related to its Electronic Data Gathering, Analysis, and Retrieval System (EDGAR) Filer Manual for upcoming EDGAR Release 19.1.

The new release is sched­uled for im­ple­men­ta­tion on March 11, 2019. The drafts have not been ap­proved by the Com­mis­sion and are subject to change. The final version of the EDGAR Filer Manual will be posted on the SEC’s Web site once it has been ap­proved.

For more in­for­ma­tion, see the fol­low­ing on the SEC’s Web site:

FASB (US Financial Accounting Standards Board) Image

FASB and ASBJ hold biannual meeting

Feb 13, 2019

On February 7–8, 2019, the FASB met with the Accounting Standards Board of Japan (ASBJ) in Tokyo, Japan. The meeting is the 25th in a series of biannual meetings the two standard setters hold to further their “cooperative efforts to develop high-quality global accounting standards.”

In ad­di­tion to giving updates on their re­spec­tive stan­dard-set­ting ac­tiv­i­ties at the meeting, the two boards ex­changed views on tech­ni­cal topics in which they both have an in­ter­est, in­clud­ing business combinations, good­will, performance reporting and disclosures, leases, and liabilities and equity.

The next meeting between the FASB and ASBJ is ex­pected to be held in the second half of 2019 in Norwalk, Connecticut. For more in­for­ma­tion about the latest meeting, see the press release on the FASB’s Web site.

SEC (US Securities and Exchange Commission) Image

SEC staff issues C&DIs related to disclosure of certain self-identified diversity characteristics

Feb 07, 2019

The staff in the SEC’s Division of Corporation Finance has updated its compliance and disclosure interpretations (C&DIs) related to preparing certain disclosures about self-identified diversity characteristics that may be required under Regulation S-K, Item 401, or, with respect to nominees, under Regulation S-K, Item 407.

Specifically, the SEC has added Questions 116.11 and 133.13.

For more in­for­ma­tion, see the Regulation S-K C&DI page on the SEC’s Web site.

FASB document Image

FASB proposes to ease transition to the credit losses standard

Feb 06, 2019

The FASB has issued a proposed Accounting Standards Update (ASU), “Targeted Transition Relief for Topic 326, Financial Instruments — Credit Losses.”

The pro­posed ASU would “allow preparers to irrevocably elect the fair value option, on an instrument-by-instrument basis, for eligible financial assets measured at amortized cost basis upon adoption of the credit losses standard.” Com­ments on the pro­posed ASU are due by March 8, 2019.

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

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Highlights of the FASB’s January 30 meeting

Jan 31, 2019

At its January 30, 2019, meeting, the FASB (1) ratified an EITF consensus and (2) held an educational session on distinguishing liabilities from equity (including convertible debt).

Ratification of EITF consensus

The FASB ratified the EITF consensus reached at the January 2019 EITF meeting on Issue 18-B, “Improvements to Accounting for Episodic Television Series,” and directed its staff to draft an ASU for a vote by written ballot.

For more information, see our related EITF Snapshot newsletter as well as the meeting minutes on the FASB’s Web site.

Distinguishing liabilities from equity (including convertible debt)

During this educational session, the Board discussed “(a) disclosures for convertible instruments, (b) determining whether instruments are indexed to, and settled in, an entity’s own stock within the context of the derivative scope exception and related disclosure, and (c) earnings per share.”

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

SEC (US Securities and Exchange Commission) Image

SEC announces recommencement of normal operations

Jan 28, 2019

In a recent statement, SEC Chairman Jay Clayton announced that the Commission “has resumed normal staffing levels and is returning to normal operations” following the end of the partial shutdown of the U.S. government.

In addition to Chairman Clayton’s statement, certain of the SEC’s offices and divisions have released announcements regarding their respective returns to normal operations, including the Office of Compliance Inspections and Examinations, the Division of Corporation Finance, the Division of Trading and Markets, and the Division of Investment Management.

FASB meeting Image

Highlights of the FASB’s January 23 meeting

Jan 24, 2019

At its January 23, 2019, meeting, the FASB discussed its projects on (1) credit losses — targeted transition relief, (2) disclosure review — income taxes, and (3) simplifying the balance sheet classification of debt.

Financial instruments — credit losses — targeted transition relief

The Board discussed the scope and transition guidance for a proposed ASU that would allow entities, upon adopting ASC 326, Financial Instruments — Credit Losses, to irrevocably elect the fair value option for certain financial assets and tentatively decided to “exclude debt securities classified as held-to-maturity from the scope.” The Board directed its staff to begin drafting a proposed ASU for a vote by written ballot.

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

Disclosure framework: disclosure review — income taxes

The Board continued redeliberating its July 2016 proposed ASU, Disclosure Framework — Changes to the Disclosure Requirements for Income Taxes, and tentatively decided that an entity would not be required to disclose either of the following:

  • The “amount of the transition tax liability resulting from the Tax Cuts and Jobs Act and the line item in the statement of financial position in which the liability is presented.”
  • A “description of a legally enforceable agreement with a government, including the duration of the agreement, the commitments made with the government under that agreement, and the amount of benefit that reduces or may reduce its income tax burden.”

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

Simplifying the balance sheet classification of debt

The Board continued redeliberating its January 2017 proposed ASU, Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent), and discussed whether contractual linkage between certain debt arrangements and unused long-term financing arrangements in place as of the balance sheet date should affect classification.

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

EITF meeting Image

EITF discusses accounting for episodic TV series at January meeting

Jan 18, 2019

At its meeting yesterday, the EITF discussed Issue No. 18-B, “Improvements to Accounting for Episodic Television Series.”

The EITF reached a final consensus on the issue at this meeting. FASB ratification is expected at the Board’s January 30, 2019, meeting, after which a final ASU will be issued.

For a detailed summary of the meeting, see Deloitte’s January 2019 EITF Snapshot as well as the meeting recap on the FASB's Web site.

 

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