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On The Horizon: FASB launches webpage on implementing new standards

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Contents FASB Webpage launched on implementing new standards
Highlights from September 13 meeting posted
Hedge accounting webcast reminder

SEC CorpFin adds Securities Act Rules C&DIs related to Regulation A
Commission closely monitoring the impact of Hurricanes Irma and Harvey

AICPA proposes Omnibus SSARS on international reporting IASB Guidance on materiality issued
Guidance proposed on accounting policies versus accounting estimates

Comment letter issued


FASB Webpage launched on implementing new standards The FASB launched a new webpage titled “Implementing New Standards” that addresses how the FASB positions entities for a successful transition to new financial accounting and reporting guidance.

The new webpage focuses on how the FASB

  • Conducts outreach with stakeholders
  • Establishes and operates transition resource groups (TRGs)
  • Offers a technical inquiry service for implementation questions

The webpage includes educational materials and implementation guidance for some of the FASB’s new standards, including ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. The webpage also includes links to the activities of, and the materials posted by, the Revenue Recognition TRG and the TRG for Credit Losses.

The FASB has produced a video that provides an overview of how the Board conducts its implementation assistance efforts. The video can also be found on the FASB’s website.


Highlights from September 13 meeting posted All decisions reached at Board meetings are tentative and may be changed at future meetings.

The FASB met on September 13 to complete redeliberations of the proposed ASU on simplifying debt classification, and took the actions summarized below.

The Board affirmed several of the proposed amendments, including the principle that an entity should classify debt arrangements and other instruments that are within the scope of the proposed guidance as noncurrent liabilities in a classified balance sheet if either of the following criteria is met on the balance-sheet date:

  • The liability is contractually due to be settled more than one year (or the operating cycle, if longer) after the balance-sheet date.
  • The entity has a contractual right to defer settlement of the liability for at least one year (or the operating cycle, if longer) after the balance-sheet date.

The Board also tentatively decided to clarify the following proposals:

  • When determining whether debt should be classified as current or noncurrent, the issuance of equity instruments after the balance-sheet date is not considered a settlement of the liability.
  • If, before the balance-sheet date, an arrangement with a third party precludes the entity from being required to transfer current assets within 12 months of the balance-sheet date, the debt would be classified as noncurrent because this arrangement is a contractual right to defer settlement.

The Board also tentatively decided to modify the proposed scope of the proposed ASU to clarify that the classification principle would also apply to lease liabilities accounted for under ASC 842, Leases.

For public business entities, the proposed guidance would be effective in fiscal years, and in interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, the proposed guidance would be effective in fiscal years beginning after December 15, 2020 and in interim periods within fiscal years beginning after December 15, 2021. Early adoption would be permitted.

The Board directed the staff to draft an ASU for vote by written ballot.

Hedge accounting webcast reminder The FASB 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.



SEC CorpFin adds Securities Act Rules C&DIs related to Regulation A The Compliance and Disclosure Interpretations described below reflect the views of the SEC staff. They are not rules, regulations, or statements of the Commission and have not been approved by the Commission. The interpretations are intended as general guidance and should not be relied on as definitive.

The staff of the SEC’s Division of Corporation Finance (CorpFin) recently added Questions 182.21 - 182. 23 to its Securities Act Rules Compliance & Disclosure Interpretations (C&DIs). The questions address certain financial statement requirements and reporting obligations of a Regulation A issuer that registers a class of securities pursuant to the Exchange Act on a Form 8-A concurrently with (that is, within 5 days after) the qualification of a Form 1-A or a post-qualification amendment to a Form 1-A, as follows:

  • Question 182.21 addresses that the financial statements in a post-qualification amendment to a Form 1-A must be current at the time it is qualified.
  • Question 182.22 provides that if the issuer’s qualified Form 1-A did not contain financial statements for the last full fiscal year preceding the fiscal year of effectiveness of the Form 8-A, the issuer is permitted to file its first annual report on Form 10-K for the fiscal year preceding the fiscal year in which the Form 8-A went effective within 90 calendar days after effectiveness of the Form 8-A.
  • Question 182.23 provides that if the issuer’s qualified Form 1-A did not contain financial statements for one or more quarterly periods that followed the most recent annual or semiannual period for which the financial statements were included in the Form 1-A and the quarterly period(s) were complete prior to effectiveness of the Form 8-A, the issuer is permitted to file a Form 10-Q for the completed quarterly period, or two Forms 10-Q if financial statements for more than one quarterly period were not included in the Form 1-A, within 45 days after effectiveness of the Form 8-A.

Commission closely monitoring the impact of Hurricanes Irma and Harvey The SEC recently announced that the Commission is closely monitoring the impact of Hurricanes Irma and Harvey on investors and capital markets and its Divisions and Offices will evaluate the possibility of granting relief from filing deadlines and other regulatory requirements for those affected by the storms. Affected entities and investment professionals are encouraged to contact the SEC staff directly with questions and concerns.



AICPA proposes Omnibus SSARS on international reporting Decisions reflected in AICPA draft documents may be changed in redeliberations based on information received in comment letters and from other sources. Decisions become final only upon issuance of a final document and are nonauthoritative.

The AICPA’s Accounting and Review Services Committee (ARSC) proposed omnibus Statement on Standards for Accounting and Review Services, Omnibus Statement on Standards for Accounting and Review Services – 2018, on international reporting issues. The proposed SSARS:

  • Creates a new AR-C Section 100, International Reporting Issues. This new section provides standards for a compilation or review when either (a) the financial statements were prepared in accordance with a financial reporting framework generally accepted in another country not adopted by an AICPA designated body, or (b) the review or compilation engagement is to be performed in accordance with both SSARS and another set of compilation or review standards.
  • Revises paragraph .06 of AR-C Section 60, General Principles for Engagements Performed in Accordance With Statements on Standards for Accounting and Review Services, to add a new definition of the term “fair presentation framework” and revises the definition of the term “financial reporting framework” to the SSARS.
  • Adds guidance from Interpretation No. 1, Considerations Related to Reviews Performed in Accordance With International Standard on Review Engagements (ISRE) 2400 (Revised), of AR-C section 90 to new AR-C Section 100 and withdraws Interpretation No. 1.
  • Revises AR-C Section 90, Review of Financial Statements, paragraph .39 to make the requirements regarding the contents of the accountant’s review report consistent with the illustrative examples in exhibit C of AR-C Section 90.

The proposed SSARS will be effective for compilations and reviews of financial statements for periods ending on or after June 15, 2019. This effective date is provisional; however, it will not be effective before this date. The technical corrections for AR-C Section 90, paragraph .39, will be effective upon issuance.

Comments are due by December 14.



IASB Guidance on materiality issued The IASB issued Practice Statement 2, Making Materiality Judgements, which provides guidance on how to apply judgment when evaluating financial statement materiality, so that entities provide information that is useful to investors rather than using IFRS requirements as a checklist. The Practice Statement provides an overview of the characteristics of materiality, presents a four-step process for making materiality judgments, and provides examples on how to make materiality judgments in specific circumstances. It does not change or create any new requirements in IFRS Standards.

The IASB also released Exposure Draft 2017/6, Definition of Material, which proposes minor amendments to both International Accounting Standard (IAS) 1, Presentation of Financial Statements, and IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, to clarify the definition of “material” and to align the definitions in IFRS Standards and in the Conceptual Framework for Financial Reporting.

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

Guidance proposed on accounting policies versus accounting estimates The IASB released for comment Exposure Draft 2017/5, Accounting Policies and Estimates, which proposes amendments to help companies distinguish accounting policies from accounting estimates. Changes in accounting estimates often impact a company’s profit or loss, while changes in accounting policies generally do not.

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



Comment letter issued On September 11, 2017, the firm issued a comment letter in response to the Proposed Revision of Description Criteria for a Description of a Service Organization's System in an SOC 2® Report.



© 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.