AccountingLink

    Comment Letters

    18 September 2018

    Comment Letter - FASB’s proposed amendments to the new credit losses standard
    In our comment letter, we supported the FASB’s proposal to reduce transition complexity by providing entities that are not public business entities with additional time to implement the new credit losses standard. We also supported the FASB’s proposal to clarify that operating lease receivables are not in the scope of the credit losses standard and that lessors should follow the impairment guidance in ASC 842 for these receivables.

    10 September 2018

    Comment Letter - PCAOB Draft Strategic Plan for 2018-2022
    In our comment letter on the PCAOB’s Draft Strategic Plan for 2018-2022, we commend the PCAOB for seeking public input and generally support the five goals the PCAOB laid out. We also offer suggestions to enhance inspection reporting, strengthen the PCAOB’s goal relating to technological innovations and expand the stakeholders with which the PCAOB engages to include foreign regulators and international standard setters. The PCAOB is expected to publish its final Strategic Plan by the end of the year.

    11 June 2018

    Comment Letter - FASB proposal to clarify the guidance on collaborative arrangements
    In our comment letter, we support the FASB’s proposal to clarify the scoping guidance in ASC 808, Collaborative Arrangements, and ASC 606, Revenue from Contracts with Customers, and believe the amendments would remove doubt about whether a counterparty in a collaborative arrangement also could be a customer for one or more transactions. However, we do not believe the FASB should preclude the presentation of amounts recorded for collaborative arrangements as revenue when the amounts are not received from a customer or directly related to third-party sales.

    15 May 2018

    Comment Letter - ASB proposed auditor reporting standard
    In our comment letter, we support the efforts by the AICPA’s Auditing Standards Board (ASB) to improve the usefulness of the auditor’s report for audits of non-issuers. We support the proposal to set requirements for auditors engaged to report on key audit matters (KAMs) rather than require the reporting of KAMs. However, we believe it would be preferable for the ASB to align the KAMs requirements with the Public Company Accounting Oversight Board (PCAOB) requirements for reporting on critical audit matters to promote comparability among auditor’s reports issued in the US.

    15 May 2018

    Comment Letter - ASB proposed omnibus statement on auditing standards to minimize certain differences with PCAOB standards
    In our comment letter, we support the ASB’s efforts to minimize unnecessary differences between its auditing standards and those of the PCAOB for related parties and communications with those charged with governance. Overall, we believe the proposed amendments would clarify the auditor’s responsibilities and enhance audit quality.

    15 May 2018

    Comment Letter - ASB proposed standard on the auditor’s responsibilities relating to other information included in annual reports
    In our comment letter, we do not support the ASB’s proposal on the auditor’s responsibility for other information in annual reports. However, we recommended ways the ASB could make the standard more operable and promote consistent application if it decides to move forward with the proposal.

    30 March 2018

    Comment Letter - FASB proposal to add new benchmark interest rate for hedge accounting
    In our comment letter, we supported the FASB’s proposal to add the overnight index swap (OIS) rate based on the Secured Overnight Financing Rate (SOFR) to the list of US benchmark interest rates in ASC 815 that are eligible to be hedged. However, instead of limiting final guidance to the SOFR OIS rate, we suggested the Board add a broader swap rate based on SOFR that would also include tenors greater than overnight. We also recommended that the Board provide relief to help entities address the accounting implications associated with the transition from LIBOR to SOFR, noting that without this relief many existing hedging relationships would likely need to be discontinued.

    5 February 2018

    Comment letter - FASB proposal to add a transition option and practical expedient for lessors to the new leases standard
    In our comment letter, we supported the FASB’s efforts to reduce the cost and complexity of applying the guidance in ASC 842, Leases. However, we believe the Board could provide additional relief by giving entities the option to use an alternative transition method that would allow them to apply the recognition and subsequent measurement guidance in ASC 842 to existing leases at the date of initial application. In addition, we expressed concern that the proposed criteria for use of the lessor practical expedient would inadvertently limit the population of leases to which the practical expedient could be applied.

    2 February 2018

    Comment letter - Reclassification of stranded tax effects
    In our comment letter, we said the FASB’s proposed guidance appropriately addresses the concerns raised by stakeholders regarding the effects of US tax reform on financial reporting. However, we questioned whether the proposed guidance would be beneficial or operational for all entities and recommended that the Board give companies the option to apply the guidance and/or exclude certain tax effects recorded in other comprehensive income from the scope of any final standard. We also supported the addition of a broader project on backwards tracing to the FASB’s standard-setting agenda.

    2 January 2018

    Comment Letter - SEC’s proposal to modernize and simplify Regulation S-K
    In our comment letter, we generally supported the proposed amendments, including the proposal to allow registrants that present three years of financial statements to omit from management’s discussion and analysis (MD&A) a discussion of the earliest year in certain circumstances. However, we suggested revisions to the two conditions the SEC proposed for registrants to omit a discussion of the earliest year. Further, we recommended that the SEC consider whether its use of a wide variety of references to materiality in Regulation S-K makes compliance unnecessarily complex.

    4 December 2017

    Comment Letter - Codification improvements
    In our comment letter, we agree that, for the most part, the proposed changes would clarify the guidance, correct errors and make minor improvements to the Codification that would not be expected to have a significant effect on current accounting practice or create a significant administrative cost for most entities. However, we express concerns about some of the proposed amendments.

    30 November 2017

    Comment Letter - FASB’s proposed consolidation reorganization
    In our comment letter, we support the FASB’s objective of making the consolidation guidance easier to navigate and apply but continue to recommend that the Board pursue the development of a single comprehensive consolidation model. If the FASB moves forward with the proposed ASU, it should provide a concordance, mapping the changes from ASC 810 to ASC 812 and any changes to the original wording. This would make it less costly for companies to implement the proposed changes. Further, we recommend that the Board allow for prospective adoption and that the guidance be effective after all companies adopt ASU 2015-02, ASU 2016-17 and ASU 2017-02.

    15 November 2017

    Comment Letter - PCAOB supplemental request for comment on proposal on audits involving other auditors
    In our comment letter, we continued to support the PCAOB’s efforts to strengthen the requirements for the lead auditor in an audit involving other auditors. However, we recommended ways to make the proposal more practical, particularly the proposed requirements related to compliance with independence and ethics requirements and the qualifications of other auditors.

    13 November 2017

    Comment Letter - FASB’s proposed amendments to the new recognition and measurement guidance
    In our comment letter, we support the FASB’s efforts to clarify certain aspects of the new guidance on recognizing and measuring financial instruments. However, we believe the Board should define “same type” of equity securities to help entities apply the guidance on changing from the measurement alternative to a fair value method. In addition, we recommend that the Board clarify the acceptability of the cost method with amortization to account for investments in qualified affordable housing projects and provide guidance on the transition approach for certain insurers that measure their equity securities without readily determinable fair values at fair value with changes in fair value recognized in other comprehensive income.

    13 November 2017

    Comment Letter - Proposed technical corrections and improvements to new leases standard
    In our comment letter, we support the FASB’s effort to address feedback from stakeholders about how to apply certain aspects of ASC 842, Leases. We agree that the proposed changes would clarify the new leases standard and correct guidance that could be misinterpreted or does not represent the intention of the FASB. We also recommend additional clarifications.

    1 November 2017

    Comment Letter - FASB’s proposal to clarify the scope and accounting guidance for contributions
    In our comment letter, we support the FASB’s proposal to clarify the scope and accounting guidance for contributions received and contributions made. We agree that the proposed amendments would help entities evaluate whether a transfer of assets should be accounted for as an exchange transaction or a contribution and distinguish between a conditional and an unconditional contribution. However, we recommend that the FASB make certain clarifications in the proposed table of indicators that would help entities determine whether an agreement includes a barrier. Further, we are concerned that the proposed effective date could create implementation challenges for certain calendar year-end entities.

    25 October 2017

    Comment letter - FASB proposal to add transition practical expedient for land easements and clarify how to apply ASC 842
    In our comment letter, we support the FASB’s objective to reduce the cost and complexity of applying the transition guidance in ASC 842, Leases. We believe the proposal could contribute to that objective by helping to clarify which land easements should be evaluated under ASC 842. However, we recommend that the Board clarify that the practical expedient would not apply to land easements previously accounted for as leases. In addition, we suggest that the Board consider additional clarifications on how to evaluate land easement contracts after the effective date of the new leases standard.

    31 August 2017

    Comment Letter - FASB proposal for targeted improvements to related party guidance for Variable Interest Entities (VIE)
    In our comment letter, we support the FASB’s objective of reducing complexity when applying the variable interest entity (VIE) guidance, but recommend they pursue development of a single comprehensive consolidation model. To the extent they move forward with the targeted improvements, we believe the FASB should provide additional guidance to clarify the current model, which would reduce the cost and complexity for all companies. Further, we support the proposed changes in the determination of whether fees paid to decision makers or service providers are a variable interest.

    30 August 2017

    Comment Letter - PCAOB proposal on auditing estimates
    In our comment letter, we supported the PCAOB’s proposal to strengthen the requirements for auditing accounting estimates, including fair value measurements. However, we believe certain aspects of the proposal could be improved or made more practical, particularly the proposed requirements relating to the use of pricing information from third parties and the valuation of investments based on an investee’s financial condition or operating results.

    30 August 2017

    Comment Letter - PCAOB proposal on using the work of specialists
    In our comment letter, we supported the PCAOB’s proposal to strengthen the requirements for using the work of specialists. We asked the PCAOB to clarify some of the proposed requirements for using the work of a company specialist that we believe could be interpreted as requiring auditors to do significantly more work than they currently do. In addition, we expressed concerns regarding the proposal to rescind Auditing Interpretation 11, Using the Work of a Specialist: Auditing Interpretations of AS 1210, which we believe provides important prescriptive guidance and examples to help auditors assess the level of assurance obtained from legal opinions.

    21 August 2017

    Comment Letter - ASB proposed auditing standard for ERISA plans
    In our comment letter, we support the Auditing Standards Board’s efforts to improve the quality of ERISA plan audits. We recommend that auditors be required to test only plan provisions where noncompliance could result in a risk of material misstatement to the financial statement amounts or disclosures. We do not believe auditors should be required to report findings resulting from testing those provisions in the auditor’s report.

    1 June 2017

    Comment letter - FASB proposal to simplify the accounting for share-based payments to nonemployees
    In our comment letter, we support the FASB’s efforts to reduce the cost and complexity of accounting for share-based payments to nonemployees by aligning it, with certain exceptions, with the accounting for share-based payments to employees. In addition, we recommend that the Board broaden the definition of an employee, simplify the proposed transition and permit the use of the expected term when valuing certain nonemployee awards.

    24 May 2017

    Comment Letter - SEC’s initiative to modernize Guide 3 disclosure requirements
    In our comment letter, we supported the Commission’s initiative to remove redundant or obsolete disclosure requirements and modernize Industry Guide 3: Statistical Disclosure by Bank Holding Companies. We also articulated concerns over the potential incorporation by reference in SEC filings of disclosures that bank holding companies currently provide under banking sector regulations.

    16 May 2017

    Comment Letter - SEC’s Inline XBRL proposal
    In our comment letter, we supported the objective of requiring structured data and data tagging to improve disclosure analysis and help investors and other market participants make more-informed decisions. However, we expressed concerns about requiring the use of Inline XBRL and suggested other actions that could be taken to improve the quality and reliability of financial statement data tagging. We noted that embedding tags in the financial statements could lead investors to assume such tags have been audited or reviewed and suggested ways to alleviate any expectation gap if the SEC moves forward with the proposal.

    5 May 2017

    Comment Letter - FASB proposal to simplify the balance sheet classification of debt
    In our comment letter, we support the FASB’s efforts to reduce the cost and complexity of determining whether debt should be classified as current or noncurrent on a classified balance sheet by replacing today’s rules-based guidance with a principles-based approach. While we also support the FASB’s proposed exception for certain waivers of covenant violations received after the balance sheet date but before the financial statements are issued, we recommend that the FASB clarify the proposed principle by requiring classification to be based on whether current assets are needed to settle the liability.

    27 March 2017

    Comment Letter - FASB proposed changes to disclosure requirement for inventory
    In our comment letter, we supported the FASB’s disclosure framework project and its objective to improve the effectiveness of disclosures in the notes to financial statements by facilitating clear communication of the information required by US GAAP that is most important to users of each entity’s financial statements. However, we asked the FASB to provide more details about the input received from users, particularly users of other than public business entities’ financial statements, and how any expanded disclosures would affect their behavior.

    7 February 2017

    Comment Letter - FASB proposal on accounting for instruments with down round features
    In our comment letter, we support the FASB’s objective to reduce the cost and complexity of accounting for certain financial instruments with down round features, and we believe the proposal would meet that objective by requiring fewer equity-linked financial instruments (or embedded features) with down round features that have to be accounted for at fair value. However, we believe the proposed guidance could cause confusion about whether a convertible instrument with an adjustment provision that could result in the recognition of a contingent beneficial conversion feature (BCF) would be in the scope of the proposed recognition and measurement guidance for down round features (i.e., ASC 480-20). Therefore, we recommend that the FASB clarify the proposed guidance on convertible instruments with down round features that are also subject to the contingent BCF guidance in ASC 470-20. We do not believe these instruments should be in the scope of ASC 480-20, because applying both the guidance in ASC 480-20 and the contingent BCF guidance in ASC 470-20 would be too complex.

    19 January 2017

    Comment letter - SEC’s annual review under the Regulatory Flexibility Act
    In our comment letter, we recommend that the Commission consider making the periodic review required by the Regulatory Flexibility Act more transparent and more robust to encourage broader and meaningful participation by constituents. We believe an effective post-implementation review process should determine whether a rule has accomplished its objective, evaluate the compliance cost for all issuers and the benefits for investors and provide feedback to inform and improve the rulemaking process.

    6 January 2017

    Comment Letter - FASB proposal on the scope of modification accounting in the stock compensation guidance
    In our comment letter, we support the Board’s objective to reduce the cost and complexity of applying modification accounting and believe many of the proposed amendments would meet that objective. However, we believe the FASB should include additional guidance about how the amendments would be operationalized.

    14 December 2016

    Comment Letter - FASB’s long-duration contracts proposal for insurers
    In our comment letter, we support the Board’s objective to simplify and enhance the financial reporting requirements for long-duration contracts issued by insurers and believe many of the proposed amendments would meet that objective. However, we believe the FASB should reconsider certain aspects of the proposal and provide additional guidance or clarification in some places.

    1 December 2016

    Comment Letter - Proposal to revise Form 5500 filed by employee benefit plans
    In our comment letter, we supported the efforts of the Department of Labor, the Internal Revenue Service and the Pension Benefit Guaranty Corporation (collectively, the Agencies) to improve employee benefit plan reporting. However, we expressed concerns about the proposed disclosures of the name of the audit engagement partner, information about the plan auditor's peer review, certain audit matters communicated by the auditor and information about master trusts and assets held for investment presented in the supplemental schedules, including hard-to-value assets. We said we recognize the need to improve the limited scope certification and provided some additional recommendations. We also suggested that the Agencies meet with the AICPA and audit firms to help clarify the intent of certain proposed requirements so we can agree on a way to provide the Agencies with the information they need to fulfill their responsibilities.

    30 November 2016

    Comment Letter - SEC’s request for input on Subpart 400 of Regulation S-K
    In our comment letter, we recommended the Commission consider reducing the current complexity around the timing of executive compensation disclosures in securities offerings and encourage a private sector initiative to develop guidance on the computation and disclosure of supplemental compensation metrics such as compensation “realizable” and “realized.” We also recommended that the Commission consider ways to enhance disclosures about diversity on public company boards and reconsider the definition of an audit committee financial expert.

    17 November 2016

    Comment Letter - FASB proposal on premium amortization on purchased callable debt securities
    In our comment letter, we supported the FASB’s proposal to shorten the amortization period for callable debt securities purchased at a premium. However, we recommended that the FASB clarify whether the proposed guidance would apply to callable instruments that do not have definitive call dates.

    3 November 2016

    Comment Letter - FASB’s hedge accounting proposal
    In our comment letter, we applaud the FASB for addressing many of the concerns raised by preparers, users and other stakeholders about the complexity of today’s hedge accounting model and the restrictions it imposes. Overall, we agree that the proposed amendments would better portray the economics of an entity’s risk management activities in its financial statements and simplify the application of hedge accounting in certain situations. However, we believe the FASB should reconsider certain aspects of the proposal and provide additional guidance or clarification in some places.

    31 October 2016

    Comment Letter - SEC proposal requiring exhibit hyperlinks
    In our comment letter, we support the SEC proposal to require registrants to include a hyperlink to each exhibit listed in the exhibit index of nearly all filings subject to Item 601 of Regulation S-K. We also reiterate our recommendation that the SEC adopt a company profile approach for organizing and presenting exhibits, other reference information, and information with respect to specific fiscal periods. We believe that approach ultimately will be a more effective way to provide access to corporate exhibits.

    31 October 2016

    Comment Letter - SEC proposal to eliminate redundant and outdated disclosures
    In our comment letter, we supported substantially all of the SEC’s proposals to eliminate disclosure requirements that have become redundant or outdated due to subsequent FASB standard setting or SEC rulemaking. We also recommended that the Commission consider rescinding a number of additional disclosure rules that, in our view, are duplicative or inconsistent with current US GAAP disclosure requirements.

    24 October 2016

    Comment Letter - FASB’s invitation to comment, Agenda consultation
    In our comment letter, we commend the FASB for its thorough and thoughtful approach to deciding which financial reporting issues to add to its future agenda. We agree that now that the Board has completed many of its major projects, it has an opportunity to consider its direction for the next few years. However, we do not believe that now is the time for the FASB to begin actively working on any new major projects, other than continuing to conduct research for future ones. We are concerned that, given the volume of major new standards entities will have to implement over the next few years, it would be difficult for preparers, users, auditors and regulators to continue monitoring new standard-setting initiatives while effectively managing changes resulting from the major new standards.

    13 October 2016

    Comment Letter - ASB’s proposal on auditor involvement with exempt offerings
    In our comment letter, we support the issuance of the Proposed Statement on Auditing Standards, Auditor Involvement With Exempt Offering Documents, which would require the auditor to perform certain procedures when the auditor is involved with an exempt offering document. Under the proposal, an auditor would be considered involved when (1) the auditor’s report on the financial statements or the auditor’s review report on interim financial information is included or incorporated by reference in the exempt offering document and (2) the auditor performs one or more specified activities (e.g., issues a comfort letter) with respect to the exempt offering document.

    4 October 2016

    Comment letter - FASB’s proposed additional technical corrections and improvements to the new revenue standard
    In our comment letter, we support the FASB’s objective to address additional feedback received from stakeholders and to make other improvements to its new revenue standard. Overall, we believe that the proposed amendments would address the additional concerns raised by constituents, provide more clarity and improve consistency in application. We also recommend additional clarifications.

    3 October 2016

    Comment Letter - FASB’s proposal to retain the consolidation guidance for NFP general partners in for-profit limited partnerships
    In our comment letter, we supported the FASB’s proposal to retain the consolidation guidance in ASC 810-20 requiring a not-for-profit entity that is a general partner in a for-profit limited partnership or similar entity to presume that it controls the entity, unless that presumption can be overcome. We also supported the FASB’s proposed clarification that not-for-profit entities (other than business-oriented health care entities) with investments in certain for-profit entities may continue to elect to measure those investments at fair value, and we offered suggestions on how the FASB could further clarify its intent.

    30 September 2016

    Comment Letter - FASB proposed changes to disclosure requirement for income taxes
    In our comment letter, we supported the FASB’s effort to improve the effectiveness of income tax disclosures, particularly incorporating disclosures required by the Securities and Exchange Commission into US GAAP. However, we asked the FASB to provide more details about the input received from users on expanding the disclosure requirements as we believe that would help other constituents understand how the proposal meets user needs. In addition, we expressed concerns about the proposed requirements to disclose agreements with a government and the future effects of tax law changes, and we recommended that the Board clarify certain aspects of the proposed requirements to promote consistency and make the disclosures as useful as possible.

    8 September 2016

    Comment letter - SEC’s proposed amendment to the definition of smaller reporting company
    In our comment letter, we offered a view on how the Commission should approach any potential changes to its accelerated filer definition. We also recommended conforming Rule 3 05 of Regulation S X with the proposed $100 million revenue limit for smaller reporting companies (i.e., require no more than two years of audited financial statements when an acquired business has annual revenue below $100 million).

    6 September 2016

    Comment Letter - ASB’s going concern proposal
    In our comment letter, we support the issuance of the Proposed Statement on Auditing Standards, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern, to promote consistency between the auditing standards and ASU 2014-15, Presentation of Financial Statements – Going Concern, which will require management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern. However, we disagree with the proposed requirement for the auditor to make inquiries of management about its knowledge of conditions or events beyond the period of management’s evaluation that raise substantial doubt about the entity’s ability to continue as a going concern.

    15 August 2016

    Comment letter - PCAOB’s reproposal on the auditor reporting model
    In our comment letter, we supported the PCAOB’s efforts to make the auditor’s report more informative and relevant for investors and other users of the financial statements. However, we offered some suggestions to clarify the definition of critical audit matters and the related disclosure requirements to reduce the instances where the auditor would provide original information about the company. We also raised some concerns related to increased auditor liability and recommended that the PCAOB eliminate the reproposed requirement to disclose auditor tenure in the auditor’s report.

    5 August 2016

    Comment letter - FASB proposal on clarifying the scope of asset derecognition guidance and accounting for partial sales of nonfinancial assets
    In our comment letter, we supported the FASB’s objective to clarify the guidance on how to account for derecognition of nonfinancial assets and in substance nonfinancial assets. We believe the proposed ASU would reduce the cost and complexity of accounting for the derecognition of nonfinancial assets by aligning it further with the accounting for the derecognition of a business. Further, the proposed ASU would result in the remeasurement of any retained noncontrolling interest to fair value, which may lead to a higher risk of future impairment and may raise further questions regarding the technical merits of recording gains on retained interests.