Compilations of financial statements that omit substantially all disclosures can provide challenges for CPAs as the pandemic hurts clients’ businesses. Here’s how CPAs can handle the challenging judgments in these engagements.
Private Company Reporting
The FASB voted to delay the effective date of its revenue recognition standard for nonpublic entities that have not yet issued their financial statements. Challenges related to the coronavirus pandemic led to the delay.
FASB proposed pandemic relief actions that included a one-year delay in its lease accounting standard for private companies and most not-for-profits.
The delays would apply to the effective date of its revenue recognition standard for nonpublic franchisors and the effective dates of its lease accounting standard for private companies and public and private not-for-profits.
Accounting for employee share-based compensation could become less complex for private companies after FASB endorsed the decision by the Private Company Council to propose a practical expedient for nonpublic entities.
FASB has expanded the election not to consolidate for private companies with variable-interest entities. Users of private company financial statements told FASB that consolidation does not help them analyze financial statements.
Private companies and certain other preparers would see delays in effective dates for accounting standards for leases, hedging, and credit losses under a proposal issued by FASB.
The amendments took effect immediately.
Effective dates for certain entities for key standards on accounting for leases, credit losses, hedging, and long-duration insurance contracts would change under a proposal FASB voted to direct its staff to draft.
The standard took effect for public companies this year.
As they implement FASB’s new lease accounting rules, private companies and not-for-profits may be surprised by the complexity of the transition and the effects on the financial statements.
Private companies are entering the final stretch of their preparations to comply with FASB’s new revenue recognition standard. Here’s how auditors can help their clients with the implementation process.
Private companies are experiencing overload as they implement complex new accounting standards, according to the AICPA Private Companies Practice Section’s Technical Issues Committee.
Private companies implementing new lease accounting rules can expect a complex transition and a substantial financial statement impact.
Private company exceptions may see wider use.
The elimination of the effective date for FASB’s private company GAAP alternatives means it’s never too late to take advantage of these accounting simplifications. Each alternative may offer substantial relief and cost savings for private companies as they perform their accounting.
The guidance supersedes the 2014 private company exception.
An Accounting Standards Update affects accounting for sales and similar taxes, certain lessor costs and certain requirements related to variable payments in contracts.
Here’s what company leaders need to know about an implementation job that may be arduous.
FASB expanded an accounting alternative for private companies and changed the rules for all entities for deciding whether a decision-making fee is a variable interest.