Financial Reporting

The SEC approved a market-based valuation model for stock options presented by Zions Bancorporation. The Zions model uses the auctioning of instruments called Employee Stock Option Appreciation Rights Securities to determine the fair value of underlying employee stock options. Some reports have suggested that valuations using this new model may be lower than those produced by models such as Black-Scholes-Merton, thus reducing employers’ share-based compensation expense. To view the SEC letter, visit .

FASB is seeking comment on whether additional and more specific valuation guidance is needed in financial reporting as well as the appropriate processes and organizations for developing guidance if such is found desirable. The invitation to comment is available at . Comments may be e-mailed to until April 15.

In response to numerous requests, the SEC Division of Corporation Finance developed filing guidance in the form of an illustrative letter for companies preparing to restate previously issued financial statements for errors in accounting for stock option grants.

The sample letter, issued by Carol Stacey, the division’s chief accountant, contains several caveats, including that following the guidance does not mean filings will not be reviewed and does not foreclose any action recommended by the division with respect to the disclosure.

In amending form 10-K, the sample letter recommends, among other things:

A note explaining the reasons for the amendment.

Selected financial data for the most recent five years as required by Item 301 of Regulation S-K, restated as necessary and with columns labeled “restated.”

Audited annual financial statements for the most recent three years, restated as necessary and with columns labeled “restated.”

The sample letter, which was issued Jan. 18, is available at .

FASB will propose a change to the current definition of discontinued operations in Statement no. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The planned proposal was among several actions the board took at its Jan. 24 meeting. If adopted, the change would require that a discontinued component of an entity be reported in the discontinued operation section of the basic financial statements only if that component is an operating segment as defined in Statement no. 131, Disclosures About Segments of an Enterprise and Related Information. Additional disclosures would be required in the notes to financial statements.


Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.


News quiz: Retirement planning, tax practice, and fraud risk

Recent reports focused on a survey that gauges the worries about retirement among CPA financial planners’ clients, a suit that affects tax practitioners, and a guide that offers advice on fraud risk. See how much you know with this short quiz.


Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.