Close
Close

FASB standard to amend hedge accounting guidance

RFP
FASB
   New standard to amend hedge accounting guidance
   PCC members appointed
SEC
   CorpFin updates Financial Reporting Manual
Office of Management and Budget
   2017 Compliance Supplement released
   Frequently Asked Questions updated
GASB
   FAF approves report on GASB scope of authority policy
   Q3 2017 newsletter issued
International Federation of Accountants (IFAC)
   IPSASB issues proposal on financial instruments
   Consultation paper released on revenue and nonexchange expenses



FASB New standard to amend hedge accounting guidance On August 28, the Board issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities, which is intended to improve how the economic results of an entity’s risk management activities are portrayed in the financial statements for hedging relationships, and to simplify the application of the current hedge accounting guidance.

For public business entities, the ASU is effective in fiscal years, and in interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the ASU is effective in fiscal years beginning after December 15, 2019 and in interim periods within fiscal years beginning after December 15, 2020.

Early adoption is permitted. If an entity early adopts the guidance in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

Key provisions of the ASU will be summarized in a forthcoming On the Horizon.

The Board has released a FASB In Focus, which provides an overview of ASU 2017-12, and will host a seminar, IN FOCUS: FASB Accounting Standards Update on Hedging, on September 25. Registration and other information is available on the FASB website.

PCC members appointed The Board of Trustees of the Financial Accounting Foundation (FAF) announced the appointment of Jeremy Dillard, Dev Strischek, and Frank Tarallo to the Private Company Council (PCC), effective January 1, 2018. These appointees will succeed Jeff Bryan, Steve Brown, and Larry Weinstock, whose terms conclude on December 31, 2017. The FAF also appointed Michael Minnis to the PCC, effective January 1, 2018. The PCC, which currently comprises 10 individuals, is allowed to have up to 12 members.

When the new appointees begin their terms on January 1, the PCC will include four members with a financial statement user background, three with a preparer background, and four with a practitioner background.

Each of the new appointees will initially serve three-year terms and will be eligible for reappointment for an additional two years.



SEC The Financial Reporting Manual (FRM) does not contain rules, regulations, or statements of the SEC and has not been approved by the Commission. It is not intended to be published views of the Division of Corporation Finance or of the Office of the Chief Accountant, such as a Staff Accounting Bulletin. The FRM was designed as an internal reference document for Division of Corporation Finance staff and should not be relied on as authoritative.

CorpFin updates Financial Reporting Manual The staff of the SEC’s Division of Corporation Finance (CorpFin) updated the Financial Reporting Manual (FRM) as of August 25. Notable changes include:

  • A new section, “Communications with the Division of Corporation Finance’s Office of Chief Accountant (CF-OCA),” was added to provide contact information for certain CF-OCA functions, such as answers to interpretive request letters and consideration of relief requests under Regulation S-X, Rule 3-13, Filing of other financial statements in certain cases.
  • Section 2065 was updated to clarify that relief requests to provide abbreviated financial statements for an acquired business that is a predecessor of the registrant should be directed to CF-OCA.
  • Section 10220.1 was updated to refer companies to Questions 101.04 and 101.05 of the Securities Act Forms Compliance and Disclosure Interpretations (C&DIs) for guidance on the omission of financial information from draft and filed registration statements for historical periods. Please refer to On the Horizon dated August 24, 2017 for further discussion on the C&DIs.
  • Section 10220.5 was updated to refer an emerging growth company to Question 2 of the Fixing America’s Surface Transportation (FAST) Act C&DIs for guidance on the omission of financial statements of other entities.



Office of Management and Budget 2017 Compliance Supplement released The Office of Management and Budget (OMB) released the 2017 2 CFR Part 200, Appendix XI Compliance Supplement (Compliance Supplement) for single audit engagements. The Compliance Supplement includes new guidance, as well as standard changes made by the OMB, such as the addition, deletion, and modification of various federal programs. It is effective for audits of fiscal years beginning after June 30, 2016 and supersedes the supplement dated June 2016.

Appendix V, “List of Changes for the 2017 Compliance Supplement,” details the changes contained in the 2017 supplement, including:

  • A cross-cutting cluster, the 477 Cluster, was added. The 477 Cluster applies to certain Department of the Interior, Department of Labor, and Department of Health and Human Services programs.
  • A new agency, Gulf Coast Ecosystem Restoration Council, was added.
  • One new cluster was added and one cluster was deleted.
  • A program was added to a cluster and a program was removed from a cluster.
  • Five programs were deleted.
  • Part 2 – Matrix of Compliance Requirements was updated to reflect added and deleted compliance requirements and to make corrections.
  • Part 3 – Compliance Requirements updated Part 3.2-I, “Procurement and Suspension and Debarment,” to reflect the extension of the grace period from two to three years for compliance with the procurement requirements in 2 CFR Part 200.

Frequently Asked Questions updated The OMB issued an updated Frequently Asked Questions (FAQs) document on the implementation of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).The updated FAQs contain 24 new questions and revisions to 4 previously issued FAQs. The FAQs provide additional context, background, and clarification on the Uniform Guidance and should be reviewed in connection with the 2017 Compliance Supplement discussed above.



GASB FAF approves report on GASB scope of authority policy The FAF approved a report, “Three-Year Review of GASB Scope of Authority: Consultation Process Policy,” which leaves the existing GASB scope of authority policy unchanged.

The GASB scope of authority policy outlined a pre-agenda consultation process for both the GASB and the FAF’s Standard-Setting Process Oversight Committee to follow in determining whether certain information that the Board might consider for standard-setting is within the scope of the GASB’s standard-setting mission.

The FAF also agreed to review the policy again within five years.

Q3 2017 newsletter issued The GASB issued the Q3 2017 edition of its GASB Outlook e-newsletter, which includes summaries of the Board’s projects and key activities.



International Federation of Accountants (IFAC) IPSASB issues proposal on financial instruments IFAC’s International Public Sector Accounting Standards Board (IPSASB) released for comment Exposure Draft 62, Financial Instruments, which proposes new simplified classification and measurement requirements for financial assets, a forward-looking impairment model, and a flexible principle-based hedge accounting model.

The proposal, which is based on IFRS 9, Financial Instruments, as modified for the public sector, would replace the existing guidance in International Public Sector Accounting Standards (IPSAS) 29, Financial Instruments: Recognition and Measurement, related to the classification, recognition, and measurement of financial instruments.  

Comments on the proposal are due by December 31.

Consultation paper released on revenue and nonexchange expenses The IPSASB also released a Consultation Paper, “Accounting for Revenue and Non-Exchange Expenses,” which seeks stakeholders’ comments on updating accounting approaches for revenue, along with comments on new approaches for nonexchange expenses, such as the provision of education, healthcare, and defense.

The paper proposes updating or replacing certain existing revenue guidance. The paper also proposes alternate approaches to recognizing revenue and nonexchange expenses, and discusses certain implementation and measurement issues.

Comments on the paper are due by January 15, 2018.



© 2017 Grant Thornton LLP, U.S. member firm of Grant Thornton International Ltd. All rights reserved. This Grant Thornton LLP On the Horizon provides information and comments on current accounting and SEC reporting issues and developments. It is not a comprehensive analysis of the subject matter covered and is not intended to provide accounting or other advice or guidance with respect to the matters addressed in this publication. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this publication. For additional information on topics covered in this publication, contact a Grant Thornton client-service partner.