New FASB standards keep focus on simplification

Rules apply to reporting of certain retirement obligations and assets and accounting for cloud-computing vendor fees.

FASB issued separate accounting standards that are designed to simplify reporting of certain employer retirement obligations and assets, as well as provide explicit guidance about how to account for fees paid in a cloud-computing arrangement.

New measurement guidelines are included in Accounting Standards Update (ASU) No. 2015-04, Compensation—Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets.

Under the standard, an entity with a fiscal year end that does not coincide with a month end will be permitted to measure defined benefit plan assets and obligations using the month end that is closest to the entity's fiscal year end.

Preparers are required to disclose this accounting policy election and the date used to measure defined benefit plan assets and obligations. The expedient does not apply to employee benefit plans, but a FASB proposal issued in April would extend the expedient to employee benefit plans, if approved.

Meanwhile, explicit guidance on how to account for cloud-computing vendor fees is included in ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement.

SPONSORED REPORT

CPEOs provide peace of mind around payroll services

The creation of these new IRS-certified service providers for small businesses clarifies some issues around traditional professional employer organizations.

QUIZ

News quiz: Senate health care bill in the spotlight

Reports related to the Republican bill to repeal many provisions of the PPACA, other tax issues, and the giant AICPA ENGAGE Conference offered a diverse reading list for June. See how much you know about recent news with this short quiz.