The Financial Accounting Standards Board’s staff March 25 2013, issued a question- and –answer guide on its proposed Accounting Standard Update, Financial Instruments- Credit Losses (Subtopic 825-15) offering 6 conceptual and 5 practical reasons behind its conclusion—which has significantly diverged from that of the International Accounting Standards Board­­­— that “it is appropriate to recognize all expected credit losses at the first reporting date following the origination of a loan.” This has been a high- priority convergence project for FASB and the IASB, both of whom now have separate impairment proposals in the public comment phase with joint redeliberations scheduled to begin in July 2013.

On March 28, 2013 FASB agreed to exend the comment deadline on this proposed ASU from April 30 to May 31, 2013.

On April 2, 2013, FASB issued for public comment a proposed ASU, Presentation of Financial Statements (Topic 205)—Reporting Discontinued Operations. The proposed Update would redefine “discontinued operations” so that only those disposals of components that represent a significant strategic shift for the organization would qualify for discontinued operations reporting.  Additionally the Update would expand disclosures. Finally, despite tentative discussions in the earlier March 13, 2013 meeting about diverging from the definition of “discontinued operation” found in International Financial Reporting Standard 5, Non-current Assets Held for Sale and Discontinued Operations, for“cash generating unit” and instead using the existing U.S. GAAP definition of “component of an entity”, the ASU aligns itself with the definition in IFRS 5.

Also on April 2, 2013, the Securities and Exchange Commission issued a report which authorizes the use of social media to post corporate information as long as it is in compliance with Regulation Fair Disclosure. This regulation requires that companies disseminate material information in a way that ensures that investors and the public learn of the development on an equal footing and simultaneously.

 In 2008, the SEC issued guidance on Regulation FD pertaining specifically to companies' use of websites to distribute information.  After chief executive officer of Netflix Reed Hastings posted on his personal Facebook page that subscribers had enjoyed “over I billion hours of content,” the company received a Wells notice from the SEC suggesting the information should have been disclosed through an 8-K filing or a press release. 

In the report the SEC was careful to point out that while it was not pursuing the case against Netflix, nevertheless it was “unlikely” that a posting of material, nonpublic information on a personal social media site of a corporate officer without advance notice to investors would qualify as acceptable within the meaning of Regulation Fair Disclosure.

Relief may be forthcoming for some auditors who have to date dealt with over 2,000 pages of auditing standards and replacing it with a “logical and easy to understand structure and numbering system,” said Martin Baumann, the Public Company Accounting Oversight Board’s chief auditor and director of professional standards,  on  March 26, 20113 at a board meeting. The PCAOB announced its plan to post for public comment a framework for organizing the standards, recategorizing and renumbering them into topic areas, following the flow of a typical audit. This framework would no longer use interim standards and would also provide references to the international standards of auditing of the International Auditing and Assurance Board. Comment letters are due by May 28, 2013.

Compiled by Laura Tieger-Salisbury, Accounting Policy and Practice Copy Editor