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

Get your clients ready for tax season

Upon its enactment in March, the American Rescue Plan Act (ARPA) introduced many new tax changes, some of which retroactively affected 2020 returns. Making the right moves now can help you mitigate any surprises heading into 2022.

100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.