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Highlights from the FASB’s February 15 meeting

Feb 17, 2017

At its February 15, 2017, meeting, the FASB discussed its project on hedging as well as its research on revenue recognition.

Financial instruments — hedging

The Board dis­cussed com­ments re­ceived on its Sep­tem­ber 2016 pro­posed ASU, Tar­geted Im­prove­ments to Ac­count­ing for Hedging Ac­tiv­i­ties, and made ten­ta­tive de­ci­sions on  (1) “[r]eturning to qualitative assessments of hedge effectiveness after performing a quantitative assessment of hedge effectiveness” and (2) “[p]otential changes to the requirements for private company hedge documentation.”

For more in­for­ma­tion, see De­loitte’s related journal entry as well as the tentative Board decisions on the FASB’s Web site.

Revenue recognition research

The Board reviewed the staff’s research on nonrecurring engineering and preproduction costs and the related reimbursements from customers. No technical decisions were made.

For more information, see Deloitte's related journal entry the tentative Board decisions on the FASB’s Web site.

SEC (US Securities and Exchange Commission) Image

President Trump signs resolution eliminating SEC disclosure rule

Feb 15, 2017

President Donald Trump has signed H.J. Resolution 41, which eliminates the requirement under which issuers engaged in the commercial development of oil, natural gas, or minerals must disclose certain payments made to U.S. federal and foreign governments.

H.J. Resolution 41 repeals SEC Rule No. 34-78167, Disclosure of Payments by Resource Extraction Issuers, which was implemented as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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FASB holds podcast on stock compensation

Feb 15, 2017

The FASB has held an investor podcast that provides an overview of the amendments made by Accounting Standards Update (ASU) No. 2016-09, "Improvements to Employee Share-Based Accounting."

The ASU simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities.

The investor podcast is available on the FASB’s YouTube channel.

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FASB discusses long-duration insurance contracts

Feb 09, 2017

At its February 8, 2017, meeting, the FASB discussed feedback received on its September 2016 proposed ASU, "Targeted Improvements to the Accounting for Long-Duration Contracts." No technical decisions were made.

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

SEC (US Securities and Exchange Commission) Image

SEC acting chairman requests feedback on implementation of pay ratio disclosure rule

Feb 07, 2017

Michael Piwowar, the SEC’s acting chairman, has requested public input on implementation issues associated with the SEC’s final rule, “Pay Ratio Disclosure.”

The final rule requires registrants — except foreign private issuers, registered investment companies, and emerging growth companies — to clearly disclose the relationship between executive compensation actually paid and the financial performance of the registrant in proxy or information statements in which executive compensation disclosures are required. Mr. Piwowar noted that since compliance with the rule became effective for fiscal years beginning on or after January 1, 2017, some issuers have “begun to encounter unanticipated compliance difficulties that may hinder them in meeting the reporting deadline.”

Comments should be submitted within the next 45 days. For more information, see the press release on the SEC’s Web site.

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AICPA issues revenue working drafts for insurance and software entities

Feb 03, 2017

The AICPA’s Revenue Recognition Task Force has released for public comment working drafts on accounting issues associated with the implementation of the new revenue standard for insurance and software entities.

The insurance working draft provides guid­ance on the application of the scope exception in the FASB’s guidance in ASC 606-10-15-2 and ASC 606-10-15-4 to contracts within the scope of ASC 944, while the software working draft dis­cusses significant financing components in software arrangements. Com­ments on the working drafts are due by April 3, 2017.

For more in­for­ma­tion, see the insurance and software Revenue Recog­ni­tion Task Force pages on the AICPA’s Web site.

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Highlights from the FASB’s February 1 meeting

Feb 03, 2017

At its February 1, 2017, meeting, the FASB discussed the agenda consultation and its project on interest income associated with the purchase of callable debt securities.

Agenda con­sul­ta­tion

The Board dis­cussed feed­back re­ceived on Chapter 4 of its August 2016 in­vi­ta­tion to comment, Agenda Con­sul­ta­tion, on re­port­ing per­for­mance and cash flows. Chapter 4 is divided into five subtopics:

  1. Income statement.
  2. Segment reporting.
  3. Other comprehensive income.
  4. Cash flow statement.
  5. Potential paths forward.

No technical decisions were made during this session.

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

Accounting for interest income associated with the purchase of callable debt securities

The Board discussed feedback received on its September 2016 proposed ASU, Premium Amortization on Purchased Callable Debt Securities, and directed the staff to draft a final ASU that would shorten the premium amortization period to the first date the security could be called (“yield to first”).

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

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SEC acting chairman directs the staff to reconsider conflict minerals guidance

Feb 01, 2017

Yesterday, Michael Piwowar, who was recently appointed as acting chairman of the SEC, made public statements related to the Commission’s 2014 guidance on its August 2012 final rule on conflict minerals.

The SEC partially stayed compliance with the conflict minerals rule after an April 2014 appellate court ruling found that the rule violated the First Amendment of the U.S. Constitution. Mr. Piwowar indicated that the “partial stay has done little to stem the tide of unintended consequences washing over the Democratic Republic of the Congo and surrounding areas.” He further noted:

[T]he temporary transition period provided for in the Rule has expired. And the reporting period beginning January 1, 2017, is the first reporting period for which no issuer falls within the terms of that transition period. In light of this, as well as the unexpected duration of the litigation, I am directing the staff to consider whether the 2014 guidance is still appropriate and whether any additional relief is appropriate in the interim.

Mr. Piwowar is requesting feedback “from interested persons on all aspects of the rule and guidance.” A comment letter page has been set up on the SEC’s Web site.

Mr. Piwowar’s statements on the conflict minerals rule and on the reconsideration of the rule’s implementation are available on the SEC’s Web site.

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GASB issues guidance on fiduciary activities

Feb 01, 2017

The GASB has issued Statement No. 84, “Fiduciary Activities.”

Statement 84 “establishes criteria for identifying fiduciary activities of all state and local governments.” The primary purpose of the Statement is to “improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported.”

Statement 84 is effective for reporting periods beginning after December 15, 2018. Early application is encouraged.

For more information, see Statement 84 on the GASB’s Web site.

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Michael Piwowar appointed as SEC acting chairman

Jan 30, 2017

Last week, President Donald Trump appointed Michael S. Piwowar as acting chairman of the SEC, since the chairman position was left vacant when Mary Jo White resigned.

Earlier this month, President Trump nominated Jay Clayton as chairman; however, confirmation hearings with Congress regarding this nomination have not yet started.

For more information, see Mr. Piwowar’s biography page on the SEC’s Web site.

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