Financial reporting

- The SEC is considering the merits of an informal proposal that would allow voluntary filing of supplemental material in financial statements by U.S. public companies, according to SEC Chief Accountant James Schnurr.

U.S. GAAP would be retained as the required basis for financial statements under an idea Schnurr is pursuing.

The SEC will ask investors, issuers, and other interested parties whether it should give companies the option to provide IFRS-prepared financial statements as supplementary items in their reporting to the SEC, Schnurr said at the AICPA Conference on Current SEC and PCAOB Developments in December.

Schnurr’s idea aims to alleviate confusion in the marketplace regarding the possibilities for IFRS in the United States. Currently, the SEC permits the use of IFRS only for foreign private issuers. The issue of expanding use of IFRS by U.S. registrants has been debated for years, and SEC Chair Mary Jo White said in May that she hoped to be able to clarify that situation soon.

Schnurr said he plans to discuss alternatives for potential further IFRS incorporation by U.S. registrants—such as the idea of informal IFRS adoption—with White and the SEC commissioners in the coming months.

“The optional use that we want to create a dialogue on is that the U.S. issuers would voluntarily be able to provide supplemental IFRS financial information,” Schnurr told reporters after his speech. “That could be anything from a full-blown set of IFRS financial statements with notes to selected financial data, to maybe even just a reconciliation, if they want to.”


- New accounting rules published by FASB establish whether and at what threshold an acquired business or not-for-profit organization can apply pushdown accounting.

Pushdown accounting occurs in an acquisition when an acquired organization uses the acquirer’s basis of accounting to prepare its financial statements.

A lack of guidance in GAAP on this topic had resulted in lack of comparability in financial statements among public, private, and not-for-profit organizations, according to FASB.

Accounting Standards Update (ASU) No. 2014-17, Business Combinations (Topic 805): Pushdown Accounting, a consensus of the FASB Emerging Issues Task Force, provides an acquired business with the option to apply pushdown accounting in its separate financial statements when an acquirer obtains control of the acquired business. The ASU is available at

The new standard also requires disclosures designed to help financial statement users evaluate the effects of pushdown accounting. These disclosures are similar to those provided by an acquirer under Topic 805, Business Combinations.

The amendments in the update take effect immediately. After the effective date (Nov. 18, 2014), an acquired entity can elect to apply the guidance to future change-in-control events or to its most recent change-in-control event. But, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle.

Meanwhile, the SEC rescinded portions of its interpretive guidance for pushdown accounting, bringing its guidance into conformity with the new FASB standard. Staff Accounting Bulletin (SAB) No. 115 rescinds SAB Topic 5.J, New Basis of Accounting Required in Certain Circumstances.

The old guidance in SAB Topic 5.J indicated that when a purchase transaction results in an entity’s becoming substantially wholly owned, a new basis of accounting should be established in the acquired entity’s financial statements to reflect the acquirer’s basis in the purchased assets and liabilities.


- The Financial Accounting Foundation (FAF), FASB, and GASB asked stakeholders to review and provide feedback on a new draft strategic plan that the organizations issued.

The draft, available at, outlines the organizations’ top four priorities, which are:

  • Practicing and promoting continued excellence in standard setting.
  • Demonstrating a commitment to leadership in standard setting.
  • Building and maintaining trust with stakeholders.
  • Contributing to the public discourse on current and future financial reporting issues.

Stakeholders are encouraged to read and share the draft and send their comments to FAF’s board of trustees is expected to consider adopting the plan at the board’s meeting this month.


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