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On the Horizon - FASB to improve EBP master trust reporting

RFP
Contents
FASB
     Board issues ASU on improving employee benefit plan master trust reporting
     Highlights from March 1 meeting posted
SEC
     Final Rule requires certain registrants to include hyperlinks to exhibits
     Proposed rule to require the use of Inline XBRL
     IFRS taxonomy available for foreign private issuers
     Request for comment on Industry Guide 3
AICPA
     FinREC releases additional revenue recognition implementation working drafts
CAQ releases highlights from November 2016 IPTF meeting
Comment letter



FASB

Board issues ASU on improving employee benefit plan master trust reporting

The Board issued ASU 2017-06, Employee Benefit Plan Master Trust Reporting – a consensus of the FASB Emerging Issues Task Force, which is intended to improve the usefulness of the information reported to users of employee benefit plan financial statements. The ASU relates primarily to how a plan reports its interest in a master trust.

The key provisions of the ASU are summarized as follows: 


  • For each master trust in which a plan holds an interest, the plan is required to disclose, as separate line items, the plan’s interest in the statement of net assets available for benefits and any changes in that interest in the statement of changes in net assets available for benefits.
  • A plan with a divided interest in the individual investments of the master trust is no longer required to disclose its percentage interest in the master trust, but rather is required to disclose the master trust’s investments by general type and the individual plan’s dollar amount of its interest in the master trust’s investments by general type.
  • All plans are required to disclose both their master trust’s other asset and liability balances and the dollar amount of the individual plan’s interest in each of those balances.
  • Health and welfare plans are no longer required to provide 401(h) account investment disclosures in their financial statements and instead are required to disclose the defined benefit plan’s name so that participants may access the investment information. There are no changes to defined benefit plan disclosures.

The amendments in the ASU are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. Entities will be required to adopt the guidance retrospectively to all periods presented.

Highlights from March 1 meeting posted

All decisions reached at Board meetings are tentative and may be changed at future meetings.

The FASB met on March 1 to discuss whether the Board should add a project to its agenda to define “readily determinable fair value” within the Master Glossary. The Board decided not to add the project, but rather to amend the example in ASC 962-325-55-17, Illustrative Financial Statements and Disclosures of a Defined Contribution Plan. The amendments will be part of the FASB’s standing project for technical corrections and improvements.



SEC

Final Rule requires certain registrants to include hyperlinks to exhibits

On March 1, the SEC adopted the Final Rule, Exhibit Hyperlinks and HTML Format, requiring registrants that file registration statements and current and periodic reports subject to the requirements under Item 601 of Regulation S-K, or registrants that file Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in these filings. To enable inclusion of these hyperlinks, the registrants are required to submit these filings in HTML format.

Registrants are required to comply with the Final Rule in filings submitted on or after September 1, 2017. Smaller reporting companies and non-accelerated filers that submit their filings in ASCII format are required to comply with the Final Rule in filings submitted on or after September 1, 2018.

Proposed rule to require the use of Inline XBRL

On the same day, the SEC issued a proposed rule to require operating companies to submit financial statement information, as well as mutual funds to submit risk/return summaries, using the Inline XBRL format, which allows filers to embed XBRL data directly into an HTML document. The proposed rule would also eliminate the requirement for filers to post Interactive Data Files to their websites.

Operating companies are currently permitted to voluntarily file structured financial information required in periodic and current reports using Inline XBRL. A mock filing is available on the SEC’s Office of Structured Disclosure website to allow the public to explore the functionality of the Inline XBRL viewer that is in use on EDGAR.

The proposed dates for operating companies to comply with the proposed rule are as follows: 


  • Large accelerated filers would be required to comply in the second year after the rule is effective.
  • Accelerated filers would be required to comply in the third year after the rule is effective.
  • All other operating company filers would be required to comply in the fourth year after the rule is effective.

The proposed rule includes a similar phase-in compliance approach for mutual funds based on net asset size.

Similar to current XBRL exhibits, Inline XBRL data would be subject to disclosure controls and procedures; however, Inline XBRL data would be excluded from the officer certification requirements under Rules 13a-14(f) and 15d-14(f) of the Exchange Act and internal control over financial reporting. In addition, auditors would not be required to perform procedures over the Inline XBRL data.

The comment period ends 60 days after the proposed rule is published in the Federal Register.

IFRS taxonomy available for foreign private issuers

The SEC also issued a Notice that the IFRS Taxonomy is available for foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB and are subject to Rule 405. These issuers may immediately begin submitting their financial statements in XBRL and are required to do so with their first annual report filed on either Form 20-F or 40-F for a fiscal period ending on or after December 15, 2017.

Request for comment on Industry Guide 3

In addition, the SEC issued a Request for Comment on the disclosures required by Industry Guide 3, Statistical Disclosure by Bank Holding Companies. The Commission is seeking comments on how to modernize the nature, timing, scope, and applicability of this guide. The SEC is also encouraging commenters when responding to consider registrants with material amounts of activities in the areas addressed in the guide, other than those that already apply the guide’s requirements.

The comment period ends 60 days after the Request for Comment is published in the Federal Register.



AICPA

FinREC releases additional revenue recognition implementation working drafts

The AICPA Financial Reporting Executive Committee (FinREC) released working drafts of five revenue recognition implementation issues for informal comment. This latest set of working drafts discusses considerations about, and provides illustrative examples for, aerospace and defense, broker dealer, power and utility, and time-share entities implementing the new revenue standard.

The implementation issues will be added to the AICPA audit and accounting guide on revenue recognition after the review of public comments and finalization of the issues.

The comment period for these working drafts ends May 1.



CAQ

CAQ releases highlights from November 2016 IPTF meeting

The highlights of joint meetings between the Center for Audit Quality’s SEC Regulations Committee’s International Practices Task Force and the SEC staff summarize issues discussed. The highlights do not represent official positions of the AICPA, the FASB, or the IASB and are neither authoritative positions nor interpretations issued by the SEC or its staff.

The CAQ recently issued the highlights of the joint meeting between its International Practices Task Force (IPTF) and the SEC staff held on November 17, 2016. Discussions at the meeting included the following topics:


  • Monitoring of inflation in certain countries, including Argentina, Venezuela, Ukraine, Malawi, Suriname, South Sudan, Sudan, Islamic Republic of Iran, and Angola
  • Retrospective application of the new leasing standard, IFRS 16, Leases, and its application on the Selected Financial Data table
  • Use of pre-acquisition and post-acquisition periods to satisfy Regulation S-X, Rule 3-05 requirements by a foreign private issuer (FPI)
  • Regulation S-X, Rule 3-09 requirements for the financial statements of a foreign business reported either for the first time or for the first time using a new basis of GAAP
  • Continued deferral through calendar year 2016 of the XBRL rule for FPIs reporting in accordance with IFRS. Subsequent to the meeting, on March 1 the SEC issued a Notice that the IFRS Taxonomy is now available for FPIs. For more information, please refer to the IFRS taxonomy available article above.



Comment letter

Comment letter issued

On February 27, the firm issued a comment letter in response to the FASB’s proposed ASU, Inventory (Topic 330): Disclosure Framework – Changes to the Disclosure Requirements for Inventory.



© 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.