The Financial Accounting Standards Board
PREMIUM BONDS CALLED EARLY
March 30: The Financial Accounting Standards Board issued a new accounting standard -Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities.
This ASU will shorten the period for which the premium on callable debt securities can be spread out—amortized—in financial statements to the earliest date the bond could be called.
The change doesn't apply to securities held at a discount. Those bonds would continue to be amortized to maturity, the rules state.
April 5: The FASB plans to issue simplified, final hedge accounting rules the second half of the year, FASB Chairman Russell Golden said at a meeting of the board's main advisory body.
The new standard will also provide a less costly approach for the treatment of items such as futures, options and other derivatives.
Golden said FASB will ease up on issuing proposals and accounting standards for the rest of the year and won’t go ahead with two major efforts on long-term insurance contracts and disclosures until after July 1.
March 28 : The Internal Revenue Service requested comments by July 24 on Notice 2017-17, a procedure under which taxpayers can request consent for an accounting method change made because of the new revenue recognition standards.
“Adoption of the new standards may create or increase differences between financial accounting and tax accounting rules,” according to the Notice.
The Treasury Department and the IRS recognize that there is interest in clarifying whether the new standards are permissible methods of accounting that may be used for federal income tax purposes,” the IRS said.
SPECIFIC INDUSTRY GUIDANCE
April 4: The American Institute of CPA’s issued 11 drafts of proposed guidance for the airlines, gaming, hospitality and time-share industries to help them meet upcoming revenue-recognition guidance.
The American Institute of CPAs’ formed 16 industry task forces to develop revenue-recognition aids tailored per industry.
The group plans to publish draft guidance on revenue reporting, with a focus on other sectors in its 16-item industry list, on the first day of each month in 2017.
The effective date of the revenue accounting standard for public companies is January 2018.
The Securities and Exchange Commission
April 4: The Senate Banking Committee voted to approve Jay Clayton 15-8. Three Democrats joined the panel's Republicans in approving Clayton. They were Sens. Jon Tester (Mont.), Mark Warner (Va.) and Heidi Heitkamp (N.D.).
Clayton is a long-time partner at Sullivan & Cromwell LLP, where he has represented large Wall Street financial institutions. At his March confirmation hearing he repeatedly said that he would not show favoritism to anyone. Clayton said that if he were confirmed and recused from hearings in which he would have a conflict of interest— as many former SEC Chairs have been—this would not interfere with his ability to lead the agency. Next step is an expected approval by the full Senate.
MONITORING ACCOUNTING STANDARDS
April 5: SEC Chief Accountant Wesley Bricker told FASB's Financial Accounting Standards Advisory Council that monitoring the adoption of new accounting standards—including revenue reporting, leases and financial instruments—will be a top priority of SEC accountants in coming months.
That focus will include scrutinizing companies’ internal controls and governance through their audit committee effectiveness, Bricker said.
INTERNATIONAL ACCOUNTING HIGHLIGHTS
INTERNATIONAL FINANCIAL REPORTING STANDARDS
March 28: Larger companies and accounting professionals in Australia have experienced considerable benefits since the country adopted international financial reporting standards 10 years ago, a study issued March 28 by the Australian Accounting Standards Board said.
Small and medium-sized entities and those in the not-for-profit sector, though, have voiced concerns about the costs of complying with IFRS.
RUSSIA: FINANCIAL REPORTING VIOLATIONS.
March 27: The Russian Central Bank has issued new criteria in Order No. 4168-U-grave violations to evaluate misstatements, including significant financial reporting violations.
A grave violation is a discrepancy of more than 20 percent between the misstatements of businesses—including financial entities—and actual financial numbers identified during audits conducted by Russia's central bank.
March 28:The Russian Finance Ministry revised rules accounting for assets and liabilities in foreign currencies.
The new regulation, to take effect April 15, would amend the ministry's Order No. 154n. The amendments allow businesses hedging their currency risks through foreign currency transactions to account for exchange rate differences in accordance with IFRS.
OPERATING SEGMENT DISCLOSURE
March 29: Companies with operating segments would have to provide additional disclosures in their financial reports under proposed changes to international financial reporting standards that the International Accounting Standards Board issued.
IASB’s exposure draft would strengthen and clarify reporting requirements in IFRS 8: Operating Segments and International Accounting Standard 34: Interim Financial Reporting.
The ED would require, among other new disclosures, companies to provide the title and role of the person or group that acts as a segment's chief operating decision maker.
March 29: The U.K. formally triggered the procedure to divorce the country from the EU, known as Brexit. U.K. financial-report preparers and investors continue to favor adopting international financial reporting standards once the U.K. leaves the European Union, Peter Timberlake, a spokesman for the U.K. Financial Reporting Council, told Bloomberg BNA correspondent David Jones.
No U.K. industries in particular would feel Brexit's impact on their existing accounting and auditing activities “unless we change the requirements, which we are not doing,” Timberlake said.
March 30:IASB published a discussion paper with seven proposed principles of disclosure for financial statements, including:
• providing entity-specific information;
• structuring financial reports to draw attention to important topics;
• eliminating pointless duplication of information; and
• publishing financial information that makes it easier to make comparisons among entities.
Composed and Compiled by Laura Tieger Salisbury, Accounting Policy and Practice reporter and editor.
Continue the discussion at Bloomberg BNA Accounting LinkedIn.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)