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FASB proposes deferring effective date of rev rec guidance

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Contents FASB
     Board proposes deferring effective date of new revenue standard
JOBS Act
     SEC adopts final rules to update and expand Regulation A



FASB proposes deferring effective date of new revenue standard All decisions reached at Board meetings are tentative and may be changed at future meetings. Decisions are included in an Exposure Draft only after a formal written ballot. Decisions reflected in Exposure Drafts are often changed in redeliberations by the Board based on information received in comment letters, at public roundtable discussions, and from other sources. Board decisions become final after a formal written ballot to issue a final Accounting Standards Update.

At its April 1 meeting, the Board tentatively decided to defer the effective date of ASU 2014-09, Revenue from Contracts with Customers, by one year, meaning the new revenue guidance would be effective as follows:

  • For public entities: Annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period
  • For all other entities (nonpublic): Annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019
The Board tentatively decided to allow early application for both public and nonpublic entities, in line with the original effective date and early-adoption options published for nonpublic entities (that is, as early as annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period).

The Board directed the staff to draft an exposure document for public comment outlining the proposed changes to the effective date, with an expected comment period of 30 days.

The FASB had previously announced its plans to explore whether to propose a delay in the effective date of the new revenue standard and indicated that it would make a decision early in the second quarter of 2015. In the past several months, the FASB has conducted outreach with public and nonpublic entities, auditors, and financial statement users. Stakeholder feedback generally supported a delay, noting, for example, that information systems changes are needed to implement the new standard and the fact that the FASB has tentatively decided to propose changes to the standard that have not yet been finalized.

The IASB plans to meet later this month to announce its decision on a possible deferral of the effective date of its largely converged standard, IFRS 15, Revenue from Contracts with Customers.



JOBS Act The Jumpstart Our Business Startups Act (JOBS Act) is intended to foster job creation and economic growth by assisting smaller companies in accessing the capital markets. Primary beneficiaries of the JOBS Act are issuers known as “emerging growth companies.”

SEC adopts final rules to update and expand Regulation A On March 25, the SEC adopted the Final Rule, Amendments to Regulation A, mandated by Title IV of the JOBS Act, to exempt from registration under the Securities Act of 1933 offerings of securities of up to $50 million in a 12-month period. The exemption is limited to certain non-SEC reporting U.S. and Canadian companies if they meet the required eligibility, disclosure, and reporting requirements.

The Final Rule, often referred to as Regulation A+, provides for two tiers of offerings:
  • Tier 1 includes securities offerings of up to $20 million in a 12-month period.
  • Tier 2 includes securities offerings of up to $50 million in a 12-month period.

Issuers offering $20 million or less of securities may elect to do so under either Tier 1 or Tier 2.

Offerings under Regulation A+ will continue to require issuers under both tiers to file an offering statement on Form 1-A. Issuers who meet certain conditions may submit their offering statement for non-public review by the SEC staff, provided that all such documents are publicly filed at least 21 days prior to qualification. The offering statement should include the issuer’s financial statements for the two most recently completed fiscal years. Such financial statements should be audited, except in a Tier 1 offering where an issuer can include unaudited financial statements if they were not previously audited. In certain cases, issuers may have to include subsequent unaudited interim financial information in the offering statement.

Tier 2 issuers will be subject to certain continuing reporting obligations, including filing an annual report on Form 1-K and a semiannual report on Form 1-SA, as well as reporting certain current events on Form 1-U.

The Final Rule will become effective 60 days after publication in the Federal Register.



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