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Accounting Roundup: Third quarter in review — 2015

Published on: Oct 02, 2015

In the third quarter of 2015, the FASB made further progress on resolving issues related to its new revenue standard (ASU 2014-09) by releasing (1) an ASU that defers the standard’s effective date by one year for all entities and permits early adoption on a limited basis and (2) two proposed ASUs to clarify and improve its guidance. The FASB also issued:

  • Two ASUs as part of its simplification initiative (on inventory and measurement-period adjustments).
  • Two ASUs (on employee benefit plans and the NPNS exception) and two proposed ASUs (on derivative-related topics) in response to final consensuses and consensuses-for-exposure, respectively, reached by the EITF.
  • An ASU clarifying the SEC staff’s position on the presentation of debt issuance costs.
  • A proposed ASU that would amend the FASB Accounting Standards Codification to indicate that the omission of disclosures about immaterial information is not an accounting error.

On the international front, there were also a number of developments related to the IASB’s own revenue standard, IFRS 15 (issued jointly with the FASB’s ASU 2014-09). Like the FASB, the IASB amended its revenue standard to defer its effective date by one year and issued a proposal that would clarify certain aspects of the standard, including identifying performance obligations, principal-versus-agent considerations, licensing, and transition. Further, the FASB’s and IASB’s joint revenue transition resource group (TRG) held a meeting to discuss nine topics, two of which (portfolio practical expedient and application of variable consideration constraint, completed contracts at transition) are expected to be further considered at a future meeting.

The IASB also decided to propose a deferral of the effective date of IFRS 9 (on financial instruments) for entities that primarily issue insurance contracts. Specifically, the IASB decided to propose amendments to IFRS 4 to give insurance entities the option of deferring — from 2018 to 2021 — IFRS 9’s effective date.
In other news, the U.S. Court of Appeals for the District of Columbia Circuit (the “Appellate Court”) upheld its April 2014 ruling that parts of the SEC’s conflict minerals rule and of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act violate the First Amendment to the extent that they require issuers to disclose that their products have “not been found to be ’DRC conflict free.’” The Appellate Court had agreed to review its April 2014 ruling in light of a separate case involving country-of-origin labeling of meat products.

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