FASB endorsed two GAAP exceptions for private companies Monday, marking a milestone in the work to provide simpler, less costly rules for private companies while producing financial statements that reflect economic reality. The endorsement by FASB of exceptions crafted by the Private Company Council (PCC) means exceptions for private companies
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Accounting & reporting
IASB makes change to defined benefit contribution accounting
Small-scale changes to financial reporting rules for employee benefit plans were published Thursday by the International Accounting Standards Board (IASB). Contributions from employees or third parties to defined benefit plans are affected by the amendments to IAS No. 19, Employee Benefits. The changes were made to simplify the accounting for
Final IASB approval of rev rec standard imminent
Progress toward a converged financial reporting standard for revenue recognition continued Wednesday when the International Accounting Standards Board (IASB) indicated its intention to approve the standard. The board’s staff now will prepare a ballot draft for a final vote. FASB also voted earlier this month to proceed to a ballot
IASB releases new rules to better reflect hedge accounting
New rules released Tuesday by the International Accounting Standards Board (IASB) are designed to improve how hedge accounting activities are reflected in financial statements. The IASB changed the rules to address preparers’ concerns about the challenges of appropriately representing their risk management activities in financial statements. The most significant changes
Accounting for income taxes standard achieves purpose, panel finds
A review panel has concluded that a 1992 financial reporting standard addressing accounting for income taxes generally achieves its purpose but may not have reduced complexity. The Financial Accounting Foundation (FAF) post-implementation review team received input for its report from financial statement users, preparers, auditors, and academics on FASB Statement
Costs often derail qualitative goodwill impairment assessment
Many companies are not making use of an optional, qualitative goodwill impairment test FASB recently introduced to enable less burdensome financial reporting, a new survey report shows. Just 29% of public companies and 22% of private companies participating in financial advisory and investment banking firm Duff & Phelps’s 2013 U.S.
Private company VIE exception approved by PCC
A GAAP exception approved Tuesday by the Private Company Council (PCC) would exempt private companies from applying consolidation guidance for variable-interest entities (VIEs) under common-control leasing arrangements. Some changes were made from the original proposal, as the PCC struggled with concerns over the definition of “common control” and other issues.
GASB’s five things to watch in pension standards implementation
New financial reporting standards for pensions of U.S. state and local governments are among the most significant rules GASB has ever approved. The standards will place unfunded pension liabilities on the balance sheets of state and local governments that provide defined benefit pensions and call for immediate recognition of more
Prepare for new revenue guidance with six key actions
There may be some false comfort in the faraway implementation date of the proposed, converged financial reporting standard FASB and the International Accounting Standards Board (IASB) are in the final stages of developing. The standard, scheduled to be released in the first quarter of 2014, would take effect for reporting
New guide helps navigate goodwill impairment testing challenges
Goodwill impairment testing has been a challenging area for many financial statement preparers since the issuance in 2001 of FASB Accounting Standards Codification (ASC) Subtopic 350-20 (formerly FASB Statement No. 142). A FASB Accounting Standards Update issued in September 2011 was designed to make this topic easier for preparers. The
FASB proposes eliminating “development stage entity” distinction
A new FASB proposal seeks to eliminate the designation of “development stage entity,” as well as related disclosure requirements, from U.S. GAAP. FASB on Thursday issued a Proposed Accounting Standards Update (ASU) that originated with the Private Company Council (PCC) and was expanded in scope to include public and private
Historic revenue recognition standard takes big step forward
A financial reporting standard designed to increase global comparability of one of the most important items in financial statements is nearing completion after an important vote Wednesday. FASB directed the board’s staff to draft a final revenue recognition standard to be submitted to the board in December for final approval.
Taking stock of leases
In anticipation of a new global standard on financial reporting for leases, Johnson & Johnson created a central repository for thousands of leases it has across hundreds of reporting units in 60 countries. J&J global lease implementation project leader Judy Ryan, CPA, gave tips during a KPMG webcast on how
Collectibility threshold added in significant change to rev rec proposal
FASB and the International Accounting Standards Board (IASB) made a significant change in a major project Wednesday by adding a collectibility threshold to the converged financial reporting standard they are developing for revenue recognition. In what’s scheduled to be their last joint meeting on a project that will significantly affect
Private company initiatives making progress
David Morgan, CPA/PFS, said members of the Tennessee Bankers Association seemed pleased earlier this fall after he gave a presentation about the features of the AICPA’s Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs). “Once … it was explained to them, that it was a good alternative,
AICPA committee calls for different dividing line on leases
An AICPA committee has suggested that FASB and the International Accounting Standards Board (IASB) create a dividing line between Type A and Type B leases that is different from the line the boards proposed. In a letter submitted to the boards Monday, the AICPA Financial Reporting Executive Committee (FinREC) supported
ARSC to propose new preparation, compilation, association standards
From Staff Reports Three new standards the AICPA Accounting and Review Services Committee (ARSC) voted Thursday to propose would help practitioners clearly distinguish between preparation and reporting services. ARSC voted to expose for public comment proposals titled Preparation of Financial Statements, Compilation Engagements, and Association With Financial Statements. An exposure
Survey shows division over FASB, IASB credit loss proposals
Investment professionals are hungry for international convergence of financial reporting standards for estimating credit losses, but they are divided on the best method for reporting, according to a new global survey. Despite numerous calls for a converged standard following the financial crisis, FASB and the International Accounting Standards Board (IASB)
PCC to ask FASB to endorse first private company GAAP exceptions
The Private Company Council (PCC) on Tuesday approved its first GAAP exceptions for private companies and will forward them to FASB for final endorsement. If FASB endorses the exceptions, they will be written into GAAP. These would be the first GAAP exceptions approved by the PCC, which was formed last
Transfer pricing and its effect on financial reporting
This article examines the relationship between transfer pricing and an entity’s tax and financial reporting. Due to increased IRS audit procedures, transfer pricing has become one of the riskiest areas for multinational corporations from both a compliance and tax planning perspective. Amazon, AOL, Adobe, Hewlett-Packard, Microsoft, and other multinationals have
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