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On the Horizon -- FASB discusses conceptual framework

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Contents

FASB
   Tentative decisions from May 3 meeting posted
   Q2 2017 FASB Outlook e-newsletter published
SEC
   Jay Clayton sworn in as new SEC chairman
AICPA
   FinREC releases additional revenue recognition implementation working draft




FASB

Tentative decisions from May 3 meeting posted

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

The FASB met on May 3 to discuss its conceptual framework project, along with proposed improvements to simplify the content of certain Codification sections. The Board’s actions are summarized below.

Conceptual framework

The Board discussed issues related to the conceptual framework and tentatively decided to

  • Retain the objective of financial reporting as presently described in Chapter 1, “The Objective of General Purpose Financial Reporting,” of Concepts Statement 8, Conceptual Framework for Financial Reporting.
  • Continue the simultaneous work on the measurement and the presentation phases of the project.
  • Add a project to its technical agenda on “elements of financial statements,” as defined in Concepts Statement 6, Elements of Financial Statements.

The Board also discussed comment letter feedback on the proposed Chapter 7, “Presentation,” of Concepts Statement 8.

Technical corrections and improvements

The Board also discussed proposed improvements to simplify the content and structure of ASC 995, U.S. Steamship Entities, and ASC 942-740, Financial Services – Depository and Lending: Income Taxes, and tentatively decided to

  • Supersede the guidance in ASC 995 on unrecognized deferred tax liabilities related to deposits in statutory reserves, and instead require entities to recognize any remaining amounts of these unrecognized deferred tax liabilities under ASC 740, Income Taxes. Entities would also be required to disclose the type of temporary difference for which a deferred tax liability was not previously recognized.
  • Eliminate the transition guidance in ASC 942-740 for the bad debt reserves of certain financial institutions that arose after December 31, 1987.
  • Delete the guidance in ASC 942-740 related to the Comptroller of the Currency’s Banking Circular 202, Accounting for Net Deferred Tax Charges.

The Board directed the staff to draft two separate proposed ASUs covering the tentative decisions for the proposed amendments to ASC 995 and ASC 942-740, each with a comment period of 60 days.

Any forthcoming proposals related to these tentative decisions would be effective upon issuance of a final ASU.

Q2 2017 FASB Outlook e-newsletter published

The FASB issued the Q2 2017 edition of its FASB Outlook e-newsletter, which includes articles that discuss

  • Reducing unnecessary complexity in financial reporting
  • How investors can stay educated about accounting changes
  • Commentary from Larry Smith, outgoing Board member, reflecting on his tenure
  • The upcoming effective dates of certain ASUs

The newsletter also includes a link to a video discussing the FASB’s conceptual framework.



SEC

Jay Clayton sworn in as new SEC chairman

On May 4, Jay Clayton was sworn in as the 32nd Chairman of the SEC. Mr. Clayton was nominated on January 20 by President Donald J. Trump and confirmed by the U.S. Senate on May 2.




AICPA

FinREC releases additional revenue recognition implementation working draft

The AICPA Financial Reporting Executive Committee (FinREC) released a working draft of a revenue recognition implementation issue for comment. This latest working draft discusses considerations about, and provides illustrative examples for, telecommunication entities implementing the new revenue standard.

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

The comment period for this working draft ends July 3.




© 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.