The Financial Accounting Standards Board
INCOME TAXES PROPOSAL
JULY 26: The Financial Accounting Standards Board proposed income tax disclosure changes to reveal cash, cash equivalents and marketable securities held by foreign subsidiaries of U.S. multinational firms. The proposal is Income Taxes (Topic 740), Disclosure Framework—Changes to the Disclosure Requirements for Income Taxes. FASB intends for this proposal, in combination with other disclosures, to bring greater transparency in the area of indefinitely reinvested foreign earnings.
CALLABLE DEBT SECURITIES
July 27: FASB voted to have its staff complete a draft accounting standard on interest income stemming from purchases of callable debt securities that will give banks, insurers and investors guidance on write-offs of premiums from buying callable bonds.
EMPLOYEE BENEFIT PLAN MASTER TRUST PROPOSAL
July 28: FASB issued the proposal to update presentation and disclosure rules related to Employee Benefit Plan Master Trust Reporting: Defined Benefit Pension Plans- (Topic 960); Defined Contribution Pension Plans (Topic 962); and Health and Welfare Benefit Plans (Topic 965); (a type of investment structure that holds assets of more than one plan sponsored by a single employer, or a by a group of employers under common control.
The Department of Labor would be the primary user of the newly proposed information.
The American Institute of CPAs
Aug. 1: The AICPA's revenue reporting task force for the telecom sector, one of 16 industry-specific task forces devising assistance in utilizing the revenue recognition standard (Accounting Standards Update 2014-09; ASC 606), focused on two issues in the items of draft guidance released for public comment.:
• portfolio accounting, in which companies may use a shortcut in choosing to account for a group of contracts collectively rather than individually; and
• accounting for contract costs specific to telecoms.
The Securities and Exchange Commission
MINERAL CONFLICTS DISCLOSURE
July 28: More than 1,200 companies filed conflict mineral reports to the Securities and Exchange Commission, ranging from Apple Inc. to General Motors Co., according to separate analyses this month backed by the two largest conflict minerals software companies Assent Compliance Inc. and Source Intelligence. More than 70 percent of companies say they still cannot make a determination to find minerals linked to armed militia groups in Africa in their supply chains.
INTERNATIONAL ACCOUNTING HIGHLIGHTS
July 25: IFRS Foundation estimated in an analysis that most or all of nearly 25,000 companies on the World Federation of Exchanges and the Federation of European and Asian Stock Exchanges use IFRS.
About half of the 48,000 domestic companies listed on the 85 major securities exchanges worldwide use international financial reporting standards.
Another listed 18,553 companies aren't required or permitted to use IFRS. Instead, they use local standards, of which 80 percent are listed in China, India, Japan and the U.S.
July 26: The IRS is seeking information from Facebook Inc. about its arrangements with third-party developers and investors to determine whether the social media giant grossly mispriced the transfer of intangibles to its Irish subsidiary in 2010, a filing in U.S. district court reveals (United States v. Facebook, Inc., N.D. Cal., No. 3:16-cv-03777, amended petition 7/25/16).
DEFINITION OF A BUSINESS
July 27: Proposals from TheInternational Accounting Standards Board to clarify the definition of a business would “help to reduce the workload for preparers,” the European Financial Reporting Advisory Group said in draft comments.
July 27: The International Public Sector Accounting Standards Board (IPSASB) issued a consultation paper soliciting advice on how central governments and central banks can make their accounting of financial instruments more useful to investors and other users of these entities' financial reports.
IPSASB also wants feedback on the types of instrument transactions that should be subject to measurement and recognition by government entities.
Aug. 1: Russian authorities approved implementation of more amendments to international financial reporting standards (IFRS) and international accounting standards (IAS).
July 29: The Public Company Accounting Oversight Board’s proposals for improving auditor supervision of other auditors only received 5 comment letters. Two of the three international commenters groups said the need to adopt a more principles-based, rather than a rules-based, perspective to allow for the flexibility required in modern-day audits, urged close cooperation with the International Auditing Assurance Standards Board’s
The California Society of CPA's agreed with the PCAOB that its proposals would clarify the role of the lead auditor in supervising the work of other auditors, would achieve greater uniformity of practice, and increase the accountability of other auditors.
INTERNATIONAL AUDITING HIGHLIGHTS
July 27: Major audit firms in the U.K. should make sure their required annual transparency reports include material that's important to investors, regulators and other stakeholders, under the revised audit firm governance code that the U.K. Financial Reporting Council published. The FRC expects major auditing firms to have three independent non-executives to oversee their work or to explain why they have less than three.
The council also said it would “work to facilitate improved engagement between firms and investors, including by organizing meetings attended by investors and INEs from all firms.”
Composed and Compiled by Laura Tieger Salisbury, Accounting Policy and Practice reporter and editor
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