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News

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EITF discusses cloud computing arrangements at January meeting

Jan 19, 2018

At its January 18, 2018, meeting, the EITF discussed Issue No. 17-A, “Customer’s Accounting for Implementation, Setup, and Other Upfront Costs (Implementation Costs) Incurred in a Cloud Computing Arrangement That Is Considered a Service Contract.”

The EITF also discussed the FASB staff’s Q&As on the financial reporting effects of the Tax Cuts and Jobs Act.

For a detailed summary of the meeting, see Deloitte’s January 2018 EITF Snapshot.

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FASB proposes income tax guidance related to new tax reform law

Jan 18, 2018

The FASB has issued a proposed Accounting Standards Update (ASU), “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income.”

The proposed ASU would amend ASC 220, Income Statement— Reporting Comprehensive Income, to require “financial statement preparers to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (or portion thereof) is recorded.” The reclassification amount “would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate.”

Comments on the proposed ASU are due by February 2, 2018. For more information, see the press release and proposed ASU on the FASB’s Web site.

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FASB issues Q&A document on tax reform

Jan 11, 2018

The FASB has published a Q&A document, “Whether Private Companies and Not-for-Profit Entities [NFPs] Can Apply SAB 118.”

The FASB stated that it would not object if private companies and NFPs apply SEC Staff Accounting Bulletin (SAB) No. 118 related to the income tax accounting implications of the Tax Cuts and Jobs Act, as long as they apply “all relevant aspects of the SAB in its entirety.”

For more information, see the press release and Q&A document on the FASB’s Web site.

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FASB discusses tax reform

Jan 11, 2018

At its January 10, 2018, meeting, the FASB discussed the financial reporting effects of the Tax Cuts and Jobs Act.

The Board decided to add the following projects to its agenda:

  • A narrow-scope project on the “reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects resulting from the newly enacted corporate tax rate in the Tax Cuts and Jobs Act.”
  • A broader project on “accounting for subsequent effects of changes in deferred tax liabilities and assets that were originally charged or credited directly to equity (‘backwards tracing’).”

In addition, the Board made tentative decisions related to transition method and disclosures as well as the potential early adoption provisions and effective date of the proposed amendments. The Board 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.

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AICPA issues revenue working draft for broker-dealers

Jan 09, 2018

The AICPA’s Revenue Recognition Task Force has released for public comment a working draft on accounting issues associated with the implementation of the new revenue standard for broker-dealers.

The working draft addresses selling and distribution fee revenue.

Comments on the working draft are due by March 1, 2018. For more information, see the revenue recognition resource page on the AICPA’s Web site.

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SEC issues guidance on communications related to security-based swaps and changes to the investment adviser rules

Jan 08, 2018

The SEC has issued two final rules, “Treatment of Certain Communications Involving Security-Based Swaps That May Be Purchased Only by Eligible Contract Participants” (Final Rule 33-10450) and “Amendments to Investment Advisers Act Rules to Reflect Changes Made by the FAST Act” (SEC Rule IA-4839).

Under Final Rule 33-10450, “certain communications involving security-based swaps will not be deemed to constitute ‘offers’ of such security-based swaps for purposes of Section 5 of the Securities Act.”

Final Rule IA-4839 amends the definitions of (1) “venture capital fund” to include “small business investment companies” and (2) “assets under management” to exclude the assets of small business investment companies with respect to implementing the private fund adviser exemption. This amendment reflects changes that the Fixing America’s Surface Transportation Act made to the Investment Advisers Act.

For more information, see the final rules (33-10450 and IA-4839) on the SEC’s Web site.

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FASB proposes targeted improvements to new leasing standard

Jan 05, 2018

The FASB has issued a proposed ASU, “Leases (Topic 842) — Targeted Improvements.”

The proposed ASU would simplify the new leasing standard’s transition requirements and would provide lessors with a practical expedient related to separating nonlease components from lease components. It is also intended to reduce the costs of implementing the new standard.

Comments on the proposed ASU are due by February 5, 2018. For more information, see the press release and pro­posed ASU on the FASB’s Web site.

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SEC reports improvements in NRSRO compliance and competition

Jan 05, 2018

The SEC has issued two annual staff reports that summarize the SEC staff’s analysis of nationally recognized statistical rating organizations (NRSROs).

The reports show that NRSROs have increased (1) their compliance with federal securities laws and (2) information technology resources. In addition, the reports note that “smaller NRSROs continue to actively compete with more established rating agencies, and some are specializing in particular rating categories and classes.”

For more information, see the press release, annual examination report, and annual report to Congress on the SEC’s Web site.

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Year in review — 2017

Jan 04, 2018

US GAAP Plus had another successful year in 2017, including 2.2 million page views. Thanks to all of our readers who have made our site’s fourth year such a success!

Our most popular pages remain our accounting standards summaries, but interest in our news, publications, resource pages, and collections continues to be high.

Our 10 most popular stories of 2017
  1. FASB simplifies measurement of goodwill impairment test (January).
  2. FASB amends certain topics on the basis of SEC staff announcements (January).
  3. FASB issues guidance on presentation of net periodic benefit cost (March).
  4. PCAOB adopts changes to the auditor’s report and proposes new requirements related to auditing accounting estimates and the use of specialists (June).
  5. FASB makes targeted improvements to hedge accounting requirements (August).
  6. FASB clarifies the definition of a business (January).
  7. FASB issues ASU amending certain SEC guidance (October).
  8. IASB finalizes amendments to IFRS 9 regarding prepayment features with negative compensation and modifications of financial liabilities (October).
  9. President Trump signs resolution eliminating SEC disclosure rule (February).
  10. IASB proposes minor amendments to IFRS 9 (April).
Our 10 most popular publications of 2017
  1. Heads Up — Internal control considerations related to adoption of the new revenue recognition standard (May).
  2. Heads Up — Frequently asked questions about the FASB’s new leases standard (April).
  3. Heads Up — Implementing the new revenue standard — How do your disclosures stack up? (June).
  4. SEC comment letters — Including industry insights (2017) (November).
  5. Heads Up — PCAOB adopts changes to the auditor’s report (June).
  6. A roadmap to applying the new revenue recognition standard (September).
  7. Heads Up — Forecasting revenue disclosures — Storm brewing? (February).
  8. A roadmap to the preparation of the statement of cash flows (2017 edition) (May).
  9. Heads Up — The new revenue standard — Are you still assessing the impact? (September).
  10. Heads Up — Adopting the new revenue standard — Where do companies stand? (April).

We hope you are enjoying a happy and safe New Year. We look forward to bringing you the latest financial reporting news in 2018.

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FASB combines ASC 305 and ASC 210

Jan 02, 2018

As part of its project on Codification improvements, the FASB has published a maintenance update that combines the guidance in ASC 305, “Cash and Cash Equivalents,” and ASC 210, “Balance Sheet,” into one topic.

Specifically, the guidance in ASC 305 has been moved to ASC 210; however, no incremental changes to the actual guidance have been made.

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