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ACCOUNTING AND SEC HEADLINES:
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Credit Losses – FASB Staff Issues Q&A to Help Organizations Estimate Expected Credit Losses on Financial Assets
The FASB has published a FASB Staff Q&A,
Topic 326, No. 2 - Developing an Estimate of Expected Credit Losses on Financial Assets. This document provides guidance from the FASB regarding the guidance in Topic 326,
Financial Instruments—Credit Losses. This Q&A does not address other regulatory, rules, or compliance requirements that entities may need to consider when preparing and issuing financial statements.
LIBOR – SEC Staff Publishes Statement Highlighting Risks for Market Participants to Consider As They Transition Away from LIBOR
The SEC staff has published a statement that encourages market participants to proactively manage their transition away from LIBOR and outlines several potential areas that may warrant increased attention during that time. It is expected that parties reporting information used to set LIBOR will stop doing so after 2021.
"The transition away from LIBOR is gaining some much needed traction, but, as the staff's statement makes clear, significant work remains," said Chairman Jay Clayton. "The risks the statement highlights deserve careful attention and I draw particular attention to the staff’s observation: 'For many market participants, waiting until all open questions have been answered to begin this important work likely could prove to be too late to accomplish the challenging task required.' The SEC will continue to monitor disclosure and risk management efforts related to the LIBOR transition, and we welcome engagement from market participants on these important matters."
As LIBOR is used extensively in the U.S. and globally as a benchmark rate to set interest rates for various commercial and financial contracts, the SEC staff noted that the “discontinuation of LIBOR could have a significant impact on financial markets and may present a material risk for market participants, including public companies, investment advisers, investment companies, and broker-dealers. These risks will be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner.”
The SEC staff statement encourages market participants to identify existing contracts that extend past 2021 to determine their exposure to LIBOR and to consider whether contracts entered into in the future should reference an alternative rate to LIBOR or include effective fallback language. The statement also contains specific guidance for how registrants might respond to risks associated with the discontinuation of LIBOR.
Software Development Costs – New Edition of Interpretation on Software Development Costs and Cloud Computing Arrangements Published
We have published an updated edition of our interpretation
Accounting for Software Development Costs and Cloud Computing Arrangements – Interpretations of U.S. GAAP. This new edition has been updated for requirements issued through and including ASU No. 2018-15,
Intangibles - Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.
See our Literature Update for complete details.
Hyperinflation – New Edition of Inflation Rates for Judging Whether an Economy Is Highly Inflationary Published
We have published a new edition of our Interpretation,
Inflation Rates for Judging Whether an Economy Is Highly Inflationary. This new edition has been issued and reflects the latest available inflation rate information. The following change was made to the classification of countries under this Interpretation from the previous Interpretation dated March 2019:
- Malawi has been moved from the “watch list” of countries that may have highly inflationary economies to the list of countries that do not have highly inflationary economies.
See our Literature Update for complete details.
Public Accounting Report – New Edition Discusses Efforts Invested in Cultural Alignment and Compatibility Played Key Role in Success of New Jersey Firms’ Merger
We have published a new edition of the Public Accounting Report (PAR),
Efforts Invested in Cultural Alignment and Compatibility Played Key Role in Success of New Jersey Firms’ Merger. Other topics discussed in this edition of PAR includes:
- PAR news digest;
- Firm vision, goals, discretion and fairness play huge roles in good partner compensation systems; and
- People, firms, and promotions.
Regulation Best Interest – SEC Chair Discusses SEC’s New Regulation Best Interest
SEC Chairman Jay Clayton recently discussed
Regulation Best Interest and the Investment Adviser Fiduciary Duty, two recent SEC standards aimed at protecting and providing choice for Main Street investors. Clayton indicated that these standards represent “a package of rules and interpretations that will enhance the quality and transparency of retail investors’ relationships with broker dealers and investment advisers. Importantly, they bring the legal requirements and mandated disclosures for broker-dealers and investment advisers in line with reasonable investor expectations. These actions do not attempt to favor one type of service or relationship. Rather, they are designed to increase investor protection while preserving access for Main Street investors—both in terms of choice and cost—to a variety of investment services and products.”
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AUDITING AND INTERNAL CONTROLS HEADLINES:
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Public Accounting Report – New Edition Discusses Efforts Invested in Cultural Alignment and Compatibility Played Key Role in Success of New Jersey Firms’ Merger
As discussed above, we have published a new edition of the Public Accounting Report (PAR),
Efforts Invested in Cultural Alignment and Compatibility Played Key Role in Success of New Jersey Firms’ Merger. Other topics discussed in this edition of PAR includes:
- PAR news digest;
- Firm vision, goals, discretion and fairness play huge roles in good partner compensation systems; and
- People, firms, and promotions.
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GOVERNMENT HEADLINES:
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Public Accounting Report – New Edition Discusses Efforts Invested in Cultural Alignment and Compatibility Played Key Role in Success of New Jersey Firms’ Merger
As discussed above, we have published a new edition of the Public Accounting Report (PAR),
Efforts Invested in Cultural Alignment and Compatibility Played Key Role in Success of New Jersey Firms’ Merger. Other topics discussed in this edition of PAR includes:
- PAR news digest;
- Firm vision, goals, discretion and fairness play huge roles in good partner compensation systems; and
- People, firms, and promotions.
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