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Business combinations

7 January 2015

To the Point - Private companies can recognize fewer intangible assets acquired in a business combination
The FASB issued final guidance that allows private companies to simplify their accounting by recognizing separately fewer intangible assets in a business combination and certain other transactions. The alternative limits the customer-related intangibles a private company recognizes separately to those that are capable of being sold or licensed independently from the other assets of the business. It also precludes the recognition of noncompetition agreements.

17 December 2014

Financial Reporting Developments - Business combinations
We have updated the pushdown accounting guidance in our Financial reporting developments publication on business combinations for Accounting Standards Update 2014-17, Pushdown Accounting - a consensus of the FASB Emerging Issues Task Force, and for SEC staff remarks at the 2014 AICPA Conference on Current SEC and PCAOB Developments relating to the presentation of expenses related to a business combination in which pushdown accounting was applied.

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Compensation matters

18 December 2014

To the Point - FASB to propose more ways to simplify accounting for employee share-based payments
The FASB tentatively decided to propose two practical expedients that private companies could use to simplify their accounting for share-based payments to employees. For both public and private companies, the Board also tentatively decided to align the classification guidance for put and call rights that are contingent on an event within an employee’s control.

9 December 2014

Comment letter – FASB proposal to simplify the measurement date of an employer’s defined benefit obligation and plan assets
In our comment letter, we supported the FASB's effort to address the cost and complexity for employers with fiscal year ends that do not fall on the end of a calendar month by providing a practical expedient to measure their defined benefit obligations and plan assets as of the end of the month closest to their fiscal year ends. We also recommended that the Board provide the same practical expedient for employee benefit plans.

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Consolidation

19 February 2015

To the Point - New consolidation guidance will affect entities in all industries
The FASB issued final guidance that eliminates the deferral of FAS 167, which has allowed reporting entities with interests in certain investment funds to follow the previous consolidation guidance in FIN 46(R), and makes changes to both the variable interest model and the voting model. While the guidance is aimed at asset managers, it will affect all reporting entities involved with limited partnerships or similar entities. In some cases, consolidation conclusions will change. In other cases, reporting entities will need to provide additional disclosures about entities that currently aren’t considered VIEs but will be considered VIEs under the new guidance. Regardless of whether conclusions change or additional disclosure requirements are triggered, reporting entities will need to re-evaluate limited partnerships and similar entities for consolidation and revise their documentation.

17 February 2015

Comment Letter - FASB proposal to increase transparency about an investment company’s investments in other investment companies
In our comment letter, we supported the Board’s efforts to increase transparency about an investment company’s investments in other investment companies by improving the existing disclosure requirements under Accounting Standards Codification 946, Financial Services - Investment Companies. However, we raised concerns about the operability and auditability of the proposed amendments.

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Fair value measurements

31 October 2014

To the Point - FASB proposes eliminating certain investments from the fair value hierarchy
The FASB proposed eliminating the requirement that entities that measure investments using the net asset value (NAV) practical expedient categorize them in the fair value hierarchy table. Under the proposal, certain disclosures about these investments would still be required. Our To the Point publication tells you what you need to know about the proposal.

20 May 2014

Financial Reporting Developments - Fair value measurement
We have updated our Financial reporting developments publication on fair value measurement to provide clarifications and enhancements to our interpretative guidance. The updates include new interpretive guidance regarding centrally cleared derivatives, clarified fair value considerations for the oil and gas industry, and a summary of SEC staff comments in the area of fair value measurements. Refer to Appendix F of the publication for a detailed listing of these updates.

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Financial instruments

12 March 2015

To the Point - FASB poised to make significant changes to credit impairment model
The FASB decided to require modified retrospective transition to its new credit impairment standard. The new standard would significantly change how entities measure and recognize credit impairment for certain financial assets and would require many more disclosures. The Board also agreed on provisions to simplify transition for certain types of assets and instructed its staff to prepare a draft of the final standard.

26 February 2015

To the Point - Proposed disclosures would link bifurcated embedded derivatives with their host contracts
The FASB issued a Proposed Accounting Standards Update that would require an entity to disclose information that would link an embedded derivative that is bifurcated from a hybrid financial instrument to its host contract. The proposed disclosures would include the locations and carrying amounts of the bifurcated derivative and its host contract (as well as the measurement attribute of the host contract) in the statement of financial position, along with the locations and amounts reported in the statement of financial performance. Comments are due by 30 April 2015.

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Income taxes

17 February 2015

To the Point - FASB may add income tax disclosures related to foreign earnings
The FASB tentatively decided to require additional income tax disclosures related to foreign earnings and indefinite reinvestment assertions. The FASB made these decisions in its review of income tax disclosures, which is part of its disclosure framework project.

28 January 2015

To the Point - FASB proposes simplifying income tax accounting
The FASB issued two proposals to simplify income tax accounting. One proposal would require companies to immediately recognize income tax expense (or benefit) on intercompany transactions in their income statements rather than defer the income tax effects of certain intercompany transactions as they do today. The other proposal would require all deferred tax assets and liabilities to be classified as noncurrent on the balance sheet.

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IFRS matters

19 December 2013

US GAAP/IFRS accounting differences identifier tool
We have updated our US GAAP/ IFRS accounting differences identifier tool, which was developed to help entities that are converting from US GAAP to IFRS or that are evaluating the effects of IFRS adoption. This release generally reflects guidance effective in 2013 and guidance finalized by the FASB and the IASB before 31 May 2013, including IFRS 10, Consolidated Financial Statements, and IFRS 11, Joint Arrangements. It also contains a discussion of current standard-setting activities at the FASB and the IASB.

6 November 2013

US GAAP versus IFRS: The basics
We have updated our US GAAP versus IFRS: The basics publication, which describes similarities and differences between US GAAP and IFRS. The updated edition generally reflects guidance effective in 2013 and guidance finalized by the FASB and the IASB before 31 May 2013, including IFRS 10, Consolidated Financial Statements, and IFRS 11, Joint Arrangements.

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Industry issues

26 March 2015

To the Point - Boards discuss revenue recognition issues that affect M&E entities as TRG prepares to take up new ones
The FASB tentatively decided at a meeting last week to amend the noncash consideration guidance in its new revenue standard that may affect media and entertainment (M&E) entities. The FASB and the IASB also tentatively decided to amend the accounting for contract modifications at transition. The Boards' Joint Transition Resource Group for Revenue Recognition, meanwhile, plans to discuss other implementation issues of interest to M&E entities, including significant financing components and material rights, at a meeting on 30 March 2015.

12 March 2015

To the Point - FASB makes final changes to proposal on short-duration insurance contract disclosures
The FASB made final changes to its proposal on new disclosures about short-duration insurance contracts, tentatively deciding that some of them could be presented as supplementary information rather than in the notes to the financial statements. The Board modified its earlier decision to require insurers to disclose in the financial statements information about claim frequency and incurred but not reported liabilities and affirmed its decisions on other disclosures. It also decided on an effective date. The FASB is expected to issue a final standard in the second quarter of 2015.

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Leases

25 March 2015

Technical Line - Final standard on leases is taking shape
The FASB and the IASB have substantially completed redeliberations on new leases standards that would require lessees to recognize assets and liabilities for most leases. Many aspects of today's lessor accounting would remain the same. Our Technical Line publication discusses how the FASB's new standard would be applied so entities can identify and evaluate the effects on their finances and operations before the Board issues the final standard, which we expect to occur in the second half of 2015.

26 February 2015

To the Point - FASB completes redeliberations on leases and directs staff to begin drafting new standard
The FASB has substantially completed redeliberations on its 2013 proposal to put most leases on lessees’ balance sheets and directed its staff to begin drafting the new standard. At this week’s meeting, the Board decided to require entities to apply the new leases standard using a modified retrospective approach at the adoption date and in comparative periods presented, with an option to use certain relief. The Board will set an effective date before issuing the new standard, which is expected in the second half of 2015.

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Private companies

17 February 2015

To the Point - PCC will consider making alternatives easier to adopt
The PCC added a project to its agenda to consider allowing companies to elect the private company accounting alternatives the FASB has provided after their effective dates. The PCC decided that older US GAAP standards should not be amended to incorporate the term public business entity at this time, ending its discussions on this project. In addition, the PCC provided input on certain FASB projects and also discussed a TPA issued by the AICPA on uncertain tax positions disclosures that conflicts with ASU 2009-06.

7 January 2015

To the Point - Private companies can recognize fewer intangible assets acquired in a business combination
The FASB issued final guidance that allows private companies to simplify their accounting by recognizing separately fewer intangible assets in a business combination and certain other transactions. The alternative limits the customer-related intangibles a private company recognizes separately to those that are capable of being sold or licensed independently from the other assets of the business. It also precludes the recognition of noncompetition agreements.

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Revenue recognition

26 March 2015

To the Point - Boards discuss revenue recognition issues that affect M&E entities as TRG prepares to take up new ones
The FASB tentatively decided at a meeting last week to amend the noncash consideration guidance in its new revenue standard that may affect media and entertainment (M&E) entities. The FASB and the IASB also tentatively decided to amend the accounting for contract modifications at transition. The Boards' Joint Transition Resource Group for Revenue Recognition, meanwhile, plans to discuss other implementation issues of interest to M&E entities, including significant financing components and material rights, at a meeting on 30 March 2015.

19 March 2015

To the Point - Boards decide to make more changes to their new revenue standards
The FASB and the IASB agreed to propose adding practical expedients to their new revenue recognition standards to make it easier for entities to account for contract modifications at transition. However, only the IASB voted to add a practical expedient for completed contracts under the full retrospective approach. The Boards also reached different decisions on how to address questions that have arisen about the guidance on noncash consideration, presentation of sales taxes and collectibility. Any changes to the standards would be subject to the due process procedures of each Board, including seeking public comment. The FASB will decide at a meeting in April whether to propose delaying the effective date of its standard.

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SEC/Other regulators

26 March 2015

To the Point - SEC adopts 'Regulation A+' to expand exempt offerings
The SEC adopted amendments to allow private companies to make exempt public offerings under Regulation A of up to $50 million of securities within a 12-month period. The rules, required by the Jumpstart Our Business Startups Act, establish two tiers of offerings with different requirements.

12 February 2015

To the Point - SEC proposes proxy disclosure of policies on hedging by employees, officers and directors
The SEC proposed a rule that would require most registrants to disclose whether they permit any employees, officers or directors to hedge their holdings of the company’s equity securities or those of certain related entities. The proposal, which is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, is intended to help shareholders understand how employees’ and directors’ interests align with their own.

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Periodic updates

26 March 2015

Financial Reporting Briefs - First quarter 2015
This publication provides you with a snapshot of the major accounting and regulatory developments that have occurred during the first quarter of 2015. This edition brings you up to speed on the Boards' priority joint projects and several other financial reporting developments.

20 March 2015

EITF Update - March 2015
The EITF reached final consensuses on effects on historical earnings per unit of master limited partnership dropdown transactions and disclosures for investments in certain entities that calculate net asset value per share (or its equivalent). The EITF also reached consensuses-for-exposure on the application of the normal purchases and normal sales scope exception to certain electricity contracts within nodal energy markets, recognition of breakage for prepaid stored-value cards and employee benefit plan simplifications.

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More topics

18 February 2015

Financial Reporting Developments - Accounting changes and error corrections
We are issuing our Financial Reporting Developments publication on accounting changes and error corrections. This publication is designed to assist professionals in understanding the financial reporting issues associated with accounting changes (including changes in accounting principle, changes in estimates and changes in reporting entity) and error corrections.

9 January 2015

To the Point - FASB eliminates reporting of extraordinary items
The FASB issued final guidance that simplifies income statement presentation by eliminating extraordinary items. This is the first standard under the FASB’s simplification initiative.

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