ACCOUNTING & AUDITING HIGHLIGHTS WEEK ENDING SEPTEMBER 22, 2017


ACCOUNTING HIGHLIGHTS:

ASSET IMPAIRMENT

September 18: New debt classification guidance to be issued by the Financial Accounting Standards Board (FASB) is causing some nail biting among construction companies, worried that it will hinder their ability to obtain credit. The forthcoming rules will change the determination for what can be classified as current debt versus long term debt. Click here to see the full story (Subscription required).

REVENUE RECOGNITION

September 18: The IPO market could see a slowdown in 2018 stemming from private companies dawdling over adopting new revenue rules that take effect next year for public companies. More than 60 percent of about 3,000 executives polled say their companies haven't yet even started implementation or remain only in the initial assessment phase of the standard. The new revenue rules are a major change for how companies report revenue. Click here to see the full story (Subscription required).

ACCOUNTING STANDARDS

September 21: The FASB seeks to cut the number of financial reporting restatements that tech start-ups and other companies have had to file because they misclassified convertible debt and other financial instruments that have traits of both debt and equity. The FASB’s objective is to clarify and simplify distinguishing debt from equity. Click here to see the full story (Subscription required).

DISCLOSURE

September 21: The Securities and Exchange Commission (SEC) said it would improve how its staff handles the process of reviewing and evaluating corporate disclosure filings. The SEC Office of the Inspector General found examiners and reviewers could do better during the disclosure review and comment letter process. Click here to see the full story (Subscription required).

September 22: Facebook Inc. is facing growing pressure from Congress over Russia's use of social media to influence the U.S. election. Facebook—which recently disclosed it was paid by Russians for election-related ads—is expected to be called before the Senate Intelligence Committee, with panel leaders demanding a full accounting from the company. Click here to see the full story (Subscription required).  

CORPORATE RESPONSIBILITY

September 21: NYC pension funds will study their $160 billion investment portfolio's carbon footprint and climate risks. The initiative is the first comprehensive climate analysis by the city's five pension funds, which constitute the fourth-largest U.S. public pension plan, and represents a bid by the city government to influence private-sector action to reduce carbon emissions. Click here to see the full story (Subscription required).   

SEGMENT REPORTING

September 22: Accounting standards setters are engaged in a new effort on segment reporting with the goal of helping investors get better information from company disclosures about their businesses. Investment analysts and investor advocates see a need for more informative footnote disclosure. In segment footnotes, companies could break out lines of business and products, and segregate operational results by geographic region. Click here to see the full story (Subscription required).

CYBERSECURITY

September 22: The vulnerability of governments and businesses to cyberattacks was exposed again when the SEC said hackers had breached its electronic database of market-moving corporate announcements, and may have profited from the information they stole. While the SEC has been aware of the breach since 2016, it wasn't until August that the agency concluded that the cybercriminals involved may have used their bounty to make illicit trades. SEC Chairman Jay Clayton said the agency's review of the breach is ongoing and that it's “coordinating with the appropriate authorities.” Click here to see the full story (Subscription required).

September 22: Companies that took advantage of the chance to practice filing sensitive information with the SEC might wish they hadn't. While the SEC is providing few details, the regulator did say the hack of its online database of corporate filings targeted what the agency calls its test Edgar system. It lets startups unfamiliar with filling out SEC forms get comfortable with the process without publicly blasting out market-moving announcements. Click here to see the full story (Subscription required).

CLIMATE CHANGE

September 22: BHP Billiton Ltd., the mining giant that's made the biggest cuts to greenhouse gas emissions among the world's top corporate emitters, has set itself the goal of becoming carbon neutral as new research shows reductions don't have to come at the cost of growth. The company is aiming to meet a target of net zero emissions from its operations in the second half of this century. Along the way, it's aiming to hold emissions at, or below, levels recorded in the 12 months ended June 30 over the next five years. Click here to see the full story (Subscription required).

TAX ADMINISTRATION

September 19: Gov. Jerry Brown (D) signed a bill to ensure that accountants can represent clients before California's new Office of Tax Appeals when it launches in January. The new law addresses concerns accounting firms have raised that the new dispute forum would be too much like a court, preventing them from representing clients both during audits and appeals. Click here to see the full story (Subscription required).

September 18: An upcoming Internal Revenue Service (IRS) hearing on proposed regulations overhauling partnership audits will give taxpayers and their advisers the chance to air their concerns and questions about the rules. The current IRS procedures are to be replaced by a new regime that provides for assessment and adjustments at the partnership entity level—rather than among individual partners—absent an election that would push out liability to the partners. Click here to see the full story (Subscription required).

September 19: The law that overhauled the IRS's process for auditing partnerships may restrict the cases in which a partner can have an accounting method different from that of the partnership. The Bipartisan Budget Act of 2015 (BBA) auditing regime provides for assessment and adjustments to items of income, gain, loss, deduction, or credit of a partnership at the entity level—rather than among individual partners—absent an election that would transfer liability to the partners. Click here to see the full story (Subscription required).

September 20: Final regulations implementing the IRS's new partnership audit regime should tighten the time frame in which the IRS can make audit adjustments, practitioners told the agency. The new regulations are currently written in a way that appear to give the agency an unlimited amount of time to make adjustments. Click here to see the full story (Subscription required).

SUSTAINABILITY

September 22: Standalone sustainability reporting—communications prepared by managements of business organizations for investors, creditors, and other external stakeholders that discuss organizations’ environmental, social, and governance (ESG) activities and impacts—by large U.S. public companies has become the norm creating the need for specific and standardized disclosure requirements. Click here to see the full story (Subscription required).  

INTERNATIONAL ACCOUNTING HIGHLIGHTS:

DIVERSITY

September 20: PwC, the global consulting firm, released data about how it compensates people of color relative to whites in its British workforce, becoming one of the first companies to do so. On average, PwC's non-white employees in the U.K. are paid almost 13 percent less than their white peers, the firm said. They received bonuses that were roughly a third smaller. Click here to see the full story (Subscription required).

Composed and Compiled by Gery Brownholtz, Accounting Editor, Bloomberg BNA

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