ACCOUNTING & AUDITING HIGHLIGHTS WEEK ENDING OCTOBER 13, 2017


ACCOUNTING HIGHLIGHTS:

DISCLOSURE

October 10: The Treasury Department has called for scrapping corporate reporting requirements on conflict minerals, pay ratios, and other topics that were put in place after the financial crisis. The department said it's not relevant to investors whether minerals in companies’ products are fueling conflict in Africa or how top executives’ compensation compares with pay for rank-and-file employees. Click here to see the full story (Subscription required).

October 13: The Securities and Exchange Commission (SEC) is looking to help companies seeking to omit personal information from required disclosures and limit repetitive reporting with proposed amendments to Regulation S-K, which governs companies’ non-financial statement disclosure requirements for periodic reports, proxy statements, and other agency filings. Click here to see the full story (Subscription required).  

October 13: Disclosures on how companies manage risks from minerals in their supply chains that have been linked to conflict and human rights abuses in central Africa show “a troubling trend,” according to a new report. Click here to see the full story (Subscription required).

LEASES

October 10: The Financial Accounting Standards Board’s (FASB) proposed changes to accounting for land easements will require all new or modified land easements to be assessed under new leases rules (ASC 842) to see if they are or contain a lease. Click here to see the full story (Subscription required).

CAPITAL FORMATION

October 11: The Trump Administration is seeking to relax the rules for companies to go public, echoing calls from the exchange industry that the current regulations are too burdensome. The Treasury Department recommended changes for financial markets regulators to consider, calling for an easier pathway to initial public offerings, with an emphasis on encouraging small companies. Click here to see the full story (Subscription required).

DEFINED BENEFIT PLANS

October 11:   Corporate pension plan sponsors have a tight deadline to update their plans to comply with new life expectancy tables from the Internal Revenue Service (IRS), but the new rule gives flexibility for some plans to delay using tables for one year. The IRS will permit sponsors that can show a business hardship the flexibility to delay using the new tables in calculating plan contributions until Jan. 1, 2019. Click here to see the full story (Subscription required).  

REGULATORY REFORM

October 11:   The Trump administration urged the overhaul of key rules underpinning trading in U.S. stock, bond and derivatives markets, calling on regulators to loosen dozens of restrictions imposed on Wall Street after the financial crisis. Click here to see the full story (Subscription required).

REVENUE RECOGNITION

October 12: Companies face both huge challenges and huge opportunities as they transition to the FASB's new revenue recognition rule, which is among the most significant financial regulatory changes in two decades. Click here to see the full story (Subscription required).

INVESTOR CONFIDENCE

October 12: The nation's main regulatory bodies have been increasingly focused on holding CPAs accountable for producing accurate financial statements—an important part of maintaining investor confidence. Click here to see the full story (Subscription required).

HEDGE ACCOUNTING

October 13: Some broker-dealers and other securities firms, eager to utilize newly simplified hedge accounting, will adopt the rules in the first quarter next year, banking executives said. The new rules will bring hedging activities more in line with how companies actually manage their risks. Current hedge accounting rules are considered difficult to apply and have limitations for hedging nonfinancial and financial risks. Click here to see the full story (Subscription required).

GLOBAL ACCOUNTING RULES

October 13: Differences in culture, law, and language will hinder full convergence of U.S. accounting with international rules from gaining any more momentum, a member of the U.S. accounting standard-setter told a securities conference. Investors who seek a common set of rules in financial reporting must continue to compare U.S. accounting rules and international rules in making their investment decisions. Click here to see the full story (Subscription required).

AUDITING HIGHLIGHTS:

AUDITOR OVERSIGHT

October 10: The Public Company Accounting Oversight Board (PCAOB) has some direct words for auditors of public companies as they scrutinize new revenue recognition accounting about to come into force: watch out for fraud. The rules could have big impacts on the amounts and timing of companies’ recognizing of revenue, widely deemed the most important single line in financial statements. Click here to see the full story (Subscription required).  

October 12: Auditors should focus on expected changes caused by the new revenue recognition, leases, and credit losses accounting standards as they review their public company clients’ financial statements for the 2017 audit cycle. Click here to see the full story (Subscription required).  

ARTIFICIAL INTELLIGENCE

October 13: The advent of artificial intelligence and machine-learning in accounting is already yielding benefits to auditors but has created a need for human oversight and supervision to guide its results, a panel of specialists in the area said. Click here to see the full story (Subscription required).

INTERNATIONAL ACCOUNTING HIGHLIGHTS:

INTERNATIONAL STANDARDS

October 10: Fonterra Co-operative Group Ltd and five other companies using international financial reporting standards have made their financial disclosures more useful by improving the presentation of notes in financial statements, the IFRS Foundation said. The foundation published Better Communication in Financial Reporting—Making Disclosures More Meaningful to illustrate how companies using IFRS can bolster their financial reporting. Click here to see the full story (Subscription required).

INTERNATIONAL DEVELOPMENTS

October 10: Standard Bank Group Ltd., Africa's largest lender, said it will terminate the services of KPMG LLP, McKinsey & Co. and SAP SE unless the companies are able to restore their reputations after doing work for businesses linked to the politically connected Gupta family. Click here to see the full story (Subscription required).

October 11: Accountants can make major contributions to China's proposed Belt & Road (B&R) trade initiative and seize business opportunities in the process. B&R offers accountants the chance to help companies build and expand their cross-border business operations. Click here to see the full story (Subscription required).

DIGITAL CURRENCY

October 10: Regulators across the globe are increasingly taking an interest in initial coin offerings, with European Central Bank Governing Council member Ewald Nowotny being the latest to weigh in. The ECB is discussing putting “concrete legal restrictions in place” as the hype around digital currencies like bitcoin is “dangerous and deeply dubious,” Nowotny said. Click here to see the full story (Subscription required).

WHISTLE BLOWERS

October 10: A senior Tesco Plc accountant-turned-whistleblower told a London jury that the pressure from managers to bridge a multi-million pound hole in the budget created an “aggressive” atmosphere and caused him and his co-workers to fall apart. Click here to see the full story (Subscription required).  

AUSTRALIA

October 11: The Australian Taxation Office has published guidance for global companies that are required to provide an annual “general purpose financial statement” to the tax authority. Click here to see the full story (Subscription required).

INDIA

October 12: India's draft rules requiring multinational groups to comply with the OECD's country-by-country reporting and master file reporting procedures will “certainly” lead to an increase in transfer pricing investigations and litigation in the country, according to practitioners. Click here to see the full story (Subscription required).

FINLAND  

October 13: The Finnish government has proposed a tax law amendment and the repeal of a 1977 European directive to implement recent EU agreements on automatic exchange of financial information with European third countries aimed at curbing tax evasion. Click here to see the full story (Subscription required).

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

Rely on expert practitioners for practical guidance and real-world approaches to complex accounting issues with Bloomberg BNA’s Financial Accounting Resource CenterTake a free trial today.