Accounting & Auditing Update

FASB has released its final update of the 2016 GAAP Financial Reporting Taxonomy, pending acceptance by the SEC, to allow public companies to prepare to use it to complete their XBRL filings. The annual update allows FASB staff to make the taxonomy easier to navigate and more effective in reflecting financial information consistently across entities. The 2016 update in particular reflects changes suggested by the banking and insurance sector as well, FASB says.

Encouraged to modify or do away with the filing entirely, the IRS is taking a look at how it might revise Schedule UTP regarding uncertain tax positions.

The American Institute of Certified Public Accountants has assembled 16 industry task forces to examine industry-specific implementation questions that are emerging as companies prepare to adopt the new principles-based revenue recognition standard. The working drafts provide insight and examples around nine specific questions, says Kim Kushmerick, senior technical manager at the AICPA. Details inside.

In the ongoing movement to new methods for recognizing revenue in financial statements, the AICPA has issued yet more new guidance for companies to consider.

Tammy Whitehouse looks at the AICPA’s seven new working drafts to address some of the hardest revenue recognition questions in software, telecommunications, and other sectors.

In the steady march to new accounting for revenue recognition, the AICPA has five more new industry-specific implementation drafts for companies to consider.

Companies adopting new revenue rules have yet more guidance to consider as the AICPA releases four more working drafts for its evolving revenue recognition guide.

In the ongoing quest for consistent interpretations of the new revenue recognition standard, task forces at the American Institute of Certified Public Accountants have issued several new papers for public comment.

Bank regulators issued a year-end Q&A on new credit loss rules to assure examiners and institutions understand that scaled modeling of loan loss allowances is permitted. Tammy Whitehouse explores.

Bankers expect CECL, a new rule on how to reflect credit losses in financial statements, to produce big accounting changes. According to Tammy Whitehouse, some say it is the biggest change ever.

Banking regulators are proposing changes to regulatory capital requirements to address forward-looking credit losses under a new accounting standard.

A pending new requirement for how to reflect loan losses in financial statements is beginning to affect how banks do business, according to a recent poll.

Big 4 firms are meeting with FASB and SEC staff to sort out how to report certain effects of tax reform when clarity on provisions within the tax law is still elusive.

Citing an “urgent” need for audit committees to get up to speed on implementation of the new revenue recognition standard, the Center for Audit Quality offers some pointers. Tammy Whitehouse has more.

The Center for Audit Quality is offering some tips to audit committees on how to query senior management regarding readiness for new lease accounting standards.

A new Center for Audit Quality alert highlights issues that auditors will need to pay special attention to in the year-end review, such as revenue recognition, related-party transactions, and more. “This alert summarizes potential areas of risk and can be a useful resource for our auditing firm members as they head into the 2014 audit cycle,” CAQ Executive Director Cindy Fornelli said.

FASB has approved a new Accounting Standards Update meant to clear up inconsistencies in how companies classify cash payments and receipts on the cash flow statement. Tammy Whitehouse has more.

Companies have some new guidance on how to account for contributions they receive and make that are not clearly governed by revenue recognition rules.

A recent survey of 335 finance executives by PwC and Financial Executives Research Foundation found that 27 percent of executives said their companies had not yet started an initial impact assessment of the new revenue standard as of summer 2015, and 48 percent had started but not completed it yet. Dusty Stallings, a PwC partner, said: “It’s very difficult to know what else you need to do to be prepared for this standard. There is still a good pocket of the population that hasn’t gotten going yet.” More inside.

Third-quarter filings suggest companies are making progress implementing new revenue rules, but still have plenty of work to do in the fourth quarter.

Companies are hitting bumps as they attempt to apply FASB’s new approach to defining discontinued operations. The standard says a discontinued operation is a major strategic shift and has a major impact on the entity, although it doesn’t provide guidance on how to define those terms, says Beth Paul, a partner with PwC. “As companies start to dispose of things and apply the standard, they’re pausing to determine if its meets that criteria,” she says. More inside.

PwC and the Financial Executives Research Foundation are offering fresh evidence that companies are behind on FASB’s new revenue recognition standard. In their joint survey of 174 companies, 54 percent said they are familiar with the standard, but only 29 percent said they would be prepared to adopt it under the full retrospective method by the effective date of 2017. FASB Vice Chairman James Kroeker said the board has begun to assess if a delay is warranted. More study details inside.

Preparers seem more concerned about how they will gather and manage the data they need to comply with new lease accounting rules than they are about new IT system needs, according to a recent Deloitte poll. Tammy Whitehouse has an in-depth look at the survey.