As anticipated in this PubCo post, at its July 17 meeting, the FASB Board signaled its intent to adopt a new “two-bucket” approach that would stagger the effective dates for new major accounting standards. Under the new approach, the effective dates of major new standards would be delayed for entities in “Bucket Two”—smaller reporting companies, private companies, employee benefit plans and not-for-profit organizations— for at least two years after the effective dates for entities in “Bucket One”—other SEC filers. The determination of whether an entity is an SRC will be based on the entity’s most recent assessment in accordance with SEC regulations. (See this PubCo post and this Cooley Alert.)
As reported in Bloomberg, FASB will soon be considering whether the mandatory adoption dates for major new accounting standards should be delayed for small public companies and privately held businesses. According to the article, testimony from some small business finance professionals at a recent meeting of the Financial Accounting Standards Advisory Council indicated that, while they may be comfortable following the same rules as bigger companies, smaller companies “don’t have the same resources as large public companies so they need extra time to implement significant new accounting rules.” However, there seemed to be a fair amount of pushback from some commentators at the meeting, which could impact FASB’s decision.
In her statement at the SEC open meeting held in 2016 to vote on issuing the proposing release for the SEC’s “Disclosure Update and Simplification,” SEC Commissioner Kara Stein protested that the proposal was, as she euphemistically framed it, so “hyper-technical” that many potential commenters may not be able “to truly access and understand what is being proposed.” Apparently, even in its final state, the release was so hyper-technical that none of SEC Commissioners could even bear to talk about it. Could that be why there was no open meeting to discuss adoption of the final rules? Just guessing, of course. What we saw instead was a Friday afternoon drop of this announcement and this 314-page release on the final rules. The SEC has also kindly provided this “demonstration version” of the rule amendments, essentially a blacklined version of the amendments. The final rules represent a component of the SEC’s disclosure effectiveness project, as well as an effort to implement one of the mandates of the FAST Act. The final rules become effective 30 days after publication in the Federal Register, and the staff will review the impact of the amendments within five years thereafter.
by Cydney Posner At Thursday’s meeting of the SEC’s Investor Advisory Committee, the Committee approved the submission of a comment letter urging FASB to reconsider its proposal to make changes to the concept of “materiality” embodied in FASB’s Conceptual Framework for Financial Reporting and FASB’s guidance on Notes to Financial […]
FASB proposes amendments regarding the concept of “materiality” in the context of disclosure requirements
by Cydney Posner FASB has issued two exposure drafts as part of its disclosure framework project, which is intended to facilitate clearer communication of GAAP information required in notes to financial statements. The two proposals are intended to “clarify the concept of materiality.”
by Cydney Posner On May 7, in remarks before a financial reporting conference in NYC, the SEC’s Chief Accountant, James Schnurr, signaled the end of the SEC’s efforts to converge International Financial Reporting Standards (IFRS) with U.S. GAAP. When Schnurr joined the SEC in October, he said, SEC Chair Mary Jo […]
Companies breathe sigh of relief — FASB to propose deferral of effective date of new revenue recognition standard
by Cydney Posner According to FASB’s “Tentative Board Decisions,” the FASB board decided yesterday to defer the effective date of the new revenue recognition standard by one year. As a result, public companies will need to apply the new revenue standard for annual reporting periods beginning after December 15, 2017 (i.e., […]