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ACCOUNTING AND SEC HEADLINES:
Cost of Film and Episodic TV Series – New Edition of GAAP Update Service Discusses ASU 2019-02
We have published a new edition of the GASB Update Service. This new edition discusses Accounting Standards Update (ASU) No. 2019-02, Entertainment–Films–Other Assets–Film Costs (Subtopic 926-20) and Entertainment–Broadcasters–Intangibles–Goodwill and Other (Subtopic 920-350) – Improvements to Accounting for Costs of Films and License Agreements for Program Materials
. This new standard applies to companies that produce,
Distribute, and/or broadcast films and TV series. Among other things, this ASU:
Checklist – New Edition of Recent Authoritative US Accounting Standards Published
- Eliminates prior US GAAP’s constraint on the capitalization of the costs of producing an episodic TV series. The likelihood of revenues from secondary markets for TV programming no longer limits the amount of costs that are capitalized.
- Ties the amortization, impairment and disclosure requirements for capitalized costs of a film or episodic TV series to the company’s predominant monetization strategy (i.e., monetized by itself or as part of a library.)
- Requires that the capitalized cost of licensed films and TV content be tested for impairment using fair value rather than net realizable value.
We have published a new edition of our Checklist, Summary Checklist of Recent Authoritative U.S. Accounting Standards
. This new edition reflects the issuance of ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments
, that clarifies and improves areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement.
AUDITING AND INTERNAL CONTROLS HEADLINES:
Government Entities – 2019 Edition of Knowledge-Based Audits of Governmental Entities Published
We have published the 2019 edition of Knowledge-Based AuditsTM of Governmental Entities
. This publication is designed to help the auditor efficiently and effectively perform financial statement audits and, when applicable, audits of internal control over financial reporting, of governmental entities in accordance with auditing standards generally accepted in the United States of America (U.S. GAAS) and generally accepted government auditing standards (GAGAS).
This edition of the publication includes revisions, updates, and enhancements to reflect current accounting authoritative literature including, among other things, auditing pronouncements through AICPA Statement on Auditing Standards (SAS) No. 133, Auditor Involvement with Exempt Offering Documents
; the revised AICPA Code of Professional Conduct (Code); and ET Section 1.295, Nonattest Services
. The 2019 tools include links to specific guidance that provides instant access to detailed analysis related to the steps and processes discussed in the workpapers. Many new tips, practice alerts, and examples have been incorporated.
The 2019 tools are current through GASB-90, Majority Equity Interests – an Amendment of GASB Statements No. 14 and No. 61
. Note that the U.S. Government Accountability Office (GAO) recently released the 2018 version of the Yellow Book (GAGAS). The 2018 revision takes effect for audits of financial statements for periods ending on or after June 30, 2020. As early implementation is not permitted, the 2019 edition of the publication has not been updated for these revisions, although practice alerts have been added. The new requirements will be incorporated in a future edition.
See our Literature Update for complete details.
Audit Documentation – New Edition of GAAS Update Service Discusses AU-C Section 230
We have published a new edition of the GASB Update Service. This new edition provides a refresher on AU-C Section 230, Audit Documentation
. Audit documentation is defined as the “record of audit procedures performed, relevant audit evidence obtained, and conclusions the auditor reached” in connection with an audit of financial statements.
Not-for-Profit Entities – AICPA Publishes TQA on Definition of Direct Care of Collection Item
The AICPA has published the new accounting Technical Question and Answer (TQA), Q&A Section 6140, Not-For-Profit Entities —.27 Definition of Direct Care of Collection Item
The new TQA provides guidance for application of FASB Accounting Standards Update (ASU) 2019-03, Not-for-Profit Entities (Topic 958): Updating the Definition of Collections
. ASU 2019-03 requires that the use of “proceeds from [collection] items that are sold to be for the acquisitions of new collection items, the direct care of existing collections, or both.”
The FASB did not define the term “direct care” in the FASB Accounting Standards Codification™, nor does ASU 2019-03 provide a definition. The FASB believes that an industry should be able to define what it considers direct care. The new TQA provides guidance on the type of expenses would be considered “direct care of existing collections” under ASU 2019-03.
TQA 6140.27 provides that important characteristics an entity should consider in determining direct care of collection items includes whether the costs:
GASB Standards – GASB Issues Guidance for Implementation of Various Pronouncements
- Enhance the life, usefulness, or quality of an entity’s collection;
- Provide a benefit to the collections, rather than the entity as a whole; and
- Exclude expenditures that are regular and ongoing in nature.
The Governmental Accounting Standards Board (GASB) has issued question-and-answer guidance intended to clarify, explain, or elaborate on the implementation and application of certain GASB Statements.
Implementation Guide No. 2019-1, Implementation Guidance Update–2019
, addresses new questions about application of the GASB’s standards on multiple topics, including but not limited to:
- Derivative instruments;
- Disaster-related expenditure-driven grants;
- Irrevocable split-interest agreements;
- Postemployment benefits;
- Tax abatement disclosures; and
- Transfers of capital assets within a financial reporting entity.
The new Implementation Guide also includes amendments to previously issued implementation guidance.
The requirements of Implementation Guide 2019-1 are effective for reporting periods beginning after June 15, 2019. Early application is encouraged for guidance related to standards that already have been implemented.
Public-Private Partnerships – New Edition of GASB Update Service Provides Overview of GASB Projects
We have published a new edition of the GASB Update Service. This new edition provides an overview of the GASB’s public-private partnerships and public-public partnerships. This edition also discusses changes that may occur to existing GAAP primarily contained in GASB Cod. Sec. S30.
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