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    Business combinations

    21 January 2016

    Comment Letter - FASB proposal on the definition of a business
    In our comment letter, we supported the FASB’s objective of helping entities evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses and said we believe the proposed amendments would simplify the evaluation. However, we recommended that the Board consider amending certain language and clarifying some of the examples in the proposal.

    14 December 2015

    Technical Line - FASB proposes changes to the definition of a business - oil and gas
    This publication focuses on how oil and gas entities would be affected by the FASB’s proposal to change the definition of a business.

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    Compensation matters

    28 January 2016

    To the Point - Employers’ presentation and disclosures for defined benefit retirement plans may change
    The FASB issued two proposals that would change certain presentation and disclosure requirements for employers that sponsor defined benefit pension and/or other postretirement benefit plans. The first proposal would require an employer to report the service cost component of net periodic benefit cost separately from the other components in the income statement and would require that only the service cost component be eligible for capitalization in assets. The second proposal would require new disclosures and eliminate certain disclosures. Comments on both proposals are due by 25 April 2016.

    15 October 2015

    To the Point - Updated mortality improvement scale should be considered in sponsors’ financial statements
    The Society of Actuaries issued an updated mortality improvement scale that could affect a sponsor’s benefit obligations and contributions. The updated mortality improvement scale reflects two additional years of Social Security mortality data that have been recently released and were not included in the MP-2014 scale. Sponsors that have not yet issued financial statements for any fiscal year need to evaluate whether the updated scale provides additional evidence about conditions that existed at the balance sheet date.

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    Consolidation

    11 February 2016

    Financial Reporting Developments - Consolidation and the Variable Interest Model: Determination of a controlling financial interest (following the adoption of ASU 2015-02, Amendments to the Consolidation Analysis)
    We have updated our Financial reporting developments publication, Consolidation and the Variable Interest Model, to reflect the comments of the SEC staff at the 2015 AICPA National Conference on Current SEC and PCAOB Developments in Washington, DC. Refer to Appendix J of the publication for a detailed list of updates.

    29 September 2015

    Financial Reporting Developments - Equity method investments
    We have updated our FRD publication on equity method investments to clarify and enhance our interpretative guidance. Refer to Appendix F of the publication for a detailed list of these updates.

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    Fair value measurements

    8 December 2015

    To the Point - FASB proposes changes to fair value measurement disclosures
    The FASB proposed eliminating, modifying and adding certain fair value measurement disclosure requirements as part of its disclosure framework project. Comments are due by 29 February 2016.

    16 July 2015

    Financial Reporting Developments - Fair value measurement
    We have updated our Financial reporting developments publication on fair value measurement primarily to reflect the issuance of ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). We also enhanced our interpretative guidance. Refer to Appendix F of the publication for a summary of the updates.

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    Financial instruments

    28 January 2016

    To the Point - New guidance on classifying and measuring financial instruments - health care not-for-profit entities
    The FASB issued final guidance that will change how entities, including business-oriented health care not-for-profit (NFP) entities, measure equity investments that do not result in consolidation and are not accounted for under the equity method and how they present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The new guidance also changes certain disclosure requirements and other aspects of current US GAAP. It does not change the guidance for classifying and measuring investments in debt securities. Health care NFPs can early adopt certain provisions in financial statements that have not yet been issued or made available to be issued.

    14 January 2016

    Comment Letter - SEC’s fund liquidity and swing pricing proposal
    In our comment letter, we recommend that the SEC clarify how mutual funds that would be allowed to use swing pricing (i.e., adjust net asset value per share (NAV) for costs associated with satisfying requests for shareholder purchases and redemptions that exceed certain thresholds) would present NAV on the balance sheet and certain financial highlights and how they would adjust NAV for trade date activity, among other things. We also express our view that auditors should not be responsible for assessing the reasonableness of a fund’s swing pricing policies and procedures and recommend that the SEC clarify that point in any adopting release.

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    Income taxes

    22 December 2015

    Quarterly tax developments - December 2015
    Our December 2015 edition is designed to help you identify changes in tax law and other events when they occur so the accounting can be reflected in the appropriate period. This edition includes enacted and effective tax legislation, as well as legislative proposals and other items, through 10 December 2015 (except as noted) to consider as you prepare your income tax provision. We've also listed our tax and other publications that provide more detail on the topics we discuss.

    22 December 2015

    To the Point - Some ‘tax extenders’ are made permanent, others are extended
    The tax law that President Barack Obama signed on 18 December 2015 retroactively reinstates certain expired tax provisions known as tax extenders. The law made certain tax provisions permanent, extended others for five years and extended others for two years. The income tax accounting effect, including the retroactive effect, of a tax law change is accounted for in the period of enactment, which in this case is the fourth quarter of 2015 for a calendar-year company.

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    IFRS matters

    22 December 2015

    US GAAP versus IFRS: The basics
    We have updated our US GAAP versus IFRS – The basics publication, which provides an overview of common differences between US GAAP and IFRS. This release generally reflects guidance effective in 2015 and guidance finalized by the FASB and the IASB as of 31 May 2015. It also discusses current standard-setting activities at the FASB and the IASB.

    22 December 2015

    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 2015 and guidance finalized by the FASB and the IASB as of 31 May 2015. It also discusses current standard-setting activities at the FASB and the IASB.

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    Industry issues

    4 February 2016

    To the Point - Centers for Medicare & Medicaid Services issue rule that may affect entities’ drug rebate estimates
    The Centers for Medicare & Medicaid Services released the covered outpatient drugs final rule that clarifies the Medicaid reimbursement and drug rebate program provisions of the Patient Protection and Affordable Care Act. Life sciences entities need to evaluate the effect of the rule on their financial statements and disclosures, including their 2015 financial statements and disclosures (e.g., Medicaid rebate estimates for inventory in the distribution channel) if they haven’t yet issued their financial statements or made them available to be issued. The rule is effective 1 April 2016. The definition of a line extension drug remains open for comment.

    28 January 2016

    To the Point - New guidance on classifying and measuring financial instruments - health care not-for-profit entities
    The FASB issued final guidance that will change how entities, including business-oriented health care not-for-profit (NFP) entities, measure equity investments that do not result in consolidation and are not accounted for under the equity method and how they present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The new guidance also changes certain disclosure requirements and other aspects of current US GAAP. It does not change the guidance for classifying and measuring investments in debt securities. Health care NFPs can early adopt certain provisions in financial statements that have not yet been issued or made available to be issued.

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    Leases

    23 November 2015

    To the Point - FASB sets an effective date for the new leases standard and modifies the lease classification test
    The FASB decided that the new leases standard would be effective for public business entities for annual and interim periods beginning after 15 December 2018. For nonpublic business entities, the effective date would be annual periods beginning after 15 December 2019, and interim periods the following year. Early adoption would be permitted for all entities. The FASB also decided to modify the economic life classification criterion for certain leases. With these decisions, the FASB completed redeliberations and directed its staff to proceed with the final standard, which it plans to issue in early 2016. The FASB revised the decisions posted on its website to say that the new leases standard would be effective for certain not-for-profit entities and employee benefit plans for annual and interim periods beginning after 15 December 2018 (i.e., the public business entity effective date). The previously posted decisions didn’t address these entities. We have updated our To the Point publication on the effective date to reflect this clarification.

    8 October 2015

    To the Point - FASB addresses issues raised during drafting of the new leases standard
    The FASB came back to the table to discuss several issues that arose as its staff was drafting its new leases standard. The Board reached decisions on a lessee’s accounting for a modification to the lease term, a lessor’s recognition of initial direct costs in a sales-type lease and a lessor’s presentation of its net investment in a sales-type or direct financing lease. The Board also considered but decided against adding separate guidance for nonpublic business entities. The Board indicated that it will set an effective date for the new standard in early November.

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    Private companies

    16 November 2015

    Comment Letter - FASB proposal on effective date and transition guidance for existing PCC alternatives
    In our comment letter, we said we continue to support providing relief to private companies under US GAAP and believe the proposal would meet that objective by allowing private companies to forgo a preferability assessment the first time they adopt an existing Private Company Council (PCC) alternative. However, we do not believe it is necessary to add a provision indicating that private companies can forgo a preferability assessment the first time they elect to apply the simplified hedge accounting approach. We also support extending the transition guidance in the PCC alternatives indefinitely.

    8 October 2015

    To the Point - FASB proposes allowing adoption of PCC alternatives at any time without a preferability assessment
    The FASB proposed eliminating the effective dates of the four Private Company Council (PCC) alternatives in US GAAP and allowing private companies to forgo a preferability assessment the first time they adopt each of these alternatives. The proposal also would extend the transition guidance in the alternatives indefinitely. Comments are due by 16 November 2015.

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    Revenue recognition

    7 January 2016

    Technical Line - Presentation and disclosure requirements for the new revenue recognition standard
    Our publication summarizes the presentation and disclosure requirements of the new revenue recognition standard and is designed to help companies better understand the significant changes. It describes both ongoing and transition disclosures, as well as SAB Topic 11.M disclosure considerations for current public entity filings. This publication expands on the presentation and disclosure chapter in our Financial reporting developments publication, Revenue from contracts with customers (ASC 606), and includes disclosure checklists for both public and nonpublic entities.

    17 December 2015

    To the Point - Boards vote to finalize amendments to principal versus agent guidance in their new revenue standards
    The FASB and the IASB unanimously voted in a joint meeting to move forward with the converged amendments they previously proposed to the principal versus agent guidance in their new revenue standards. The amendments are intended to result in more consistent application and reduce the cost and complexity of applying the new guidance.

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    SEC/Other regulators

    14 January 2016

    Comment Letter - SEC’s fund liquidity and swing pricing proposal
    In our comment letter, we recommend that the SEC clarify how mutual funds that would be allowed to use swing pricing (i.e., adjust net asset value per share (NAV) for costs associated with satisfying requests for shareholder purchases and redemptions that exceed certain thresholds) would present NAV on the balance sheet and certain financial highlights and how they would adjust NAV for trade date activity, among other things. We also express our view that auditors should not be responsible for assessing the reasonableness of a fund’s swing pricing policies and procedures and recommend that the SEC clarify that point in any adopting release.

    17 December 2015

    To the Point - SEC proposes rule to limit use of derivatives by regulated investment companies
    The SEC proposed a rule to enhance investor protection by setting restrictions on the use of derivatives and financial commitment transactions by mutual funds, exchange-traded funds, closed-end funds and business development companies. In proposing the rule, the SEC said it was responding to growth in the volume and complexity of derivatives and their increased use by certain funds.

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    Periodic updates

    14 January 2016

    2015 Standard Setter Update - Financial reporting and accounting developments
    Our 2015 Standard Setter Update, Financial reporting and accounting developments, highlights significant developments in financial accounting and reporting between 1 January 2015 and 31 December 2015 and summarizes certain proposals presently under consideration by the FASB, EITF, PCC, SEC, PCAOB, ASB and GASB.

    7 January 2016

    SEC in Focus - January 2016
    Our latest newsletter summarizes SEC developments in the last quarter, including certain items we have not previously reported in Week in Review. This issue highlights the remarks of the SEC’s Chair and staff at the AICPA National Conference on Current SEC and PCAOB Developments related to internal control over financial reporting, segment reporting and the new revenue recognition standard. We also discuss the SEC's progress on rulemaking and other initiatives, including final rules on crowdfunding and changes to SEC rules affecting emerging growth companies resulting from recent legislation, and developments in the SEC’s disclosure effectiveness initiative.

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    More topics

    10 February 2016

    Comment Letter - FASB proposal on disclosures of government assistance
    In our comment letter, we supported the FASB’s objective of improving the reporting and disclosure of certain government assistance arrangements, but we did not agree that the approach taken by the Board would meet that objective. We believe that the FASB should first develop recognition and measurement guidance for government assistance arrangements and then consider disclosure requirements for arrangements within the scope of that guidance. If the Board believes that additional disclosures should be required for arrangements accounted for under other topics in the Accounting Standards Codification, we believe that the Board should amend the disclosure requirements in those topics to specifically address those matters.

    23 December 2015

    Comment Letter - Amendments to conceptual framework for financial reporting, chapter 3: qualitative characteristics of useful financial information
    In our comment letters, we continue to support the objective of the FASB in its disclosure framework project to improve disclosure effectiveness in the notes to the financial statements. We supported the FASB’s proposal to align its definition of materiality in the Conceptual Framework with that of the SEC and the PCAOB. However, we have concerns that the proposed evaluation of materiality of omitted disclosures is not sufficiently clear to be applied consistently by preparers, auditors and regulators.

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