It’s all but official. On October 16th, the FASB voted to approve delays for private companies on three new accounting standards, one of which is Leases. The expected Accounting Standards Update (ASU), on which FASB voting will be the official action to implement the deferrals, is expected in November. By the way, the other two standards deferred under this vote are “credit losses” (or CECL) and “hedging”. As the effective date draws closer, we will certainly be posting about CECL, since some aspects apply to all companies. (more…)
Now that all of the performance obligations (Step 2) of the contract have been separately identified, it’s time to determine a transaction price. Seems easy, right?
ASC 606 defines the transaction price as “the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes).” On the surface this sounds like an easy step for your entity to identify the price you are selling a product for, but in practice we know that not all transaction prices are fixed at the onset of the contract. When calculating the transaction price, an entity needs to consider all of the following: (more…)
Revenue recognition is getting a lot of attention since ASC Topic 606 “Revenue from Contracts with Customers” was first issued in 2014. Since that date, we have had several posts on our blog that focus on some of the details and changes related to the new standard. As we get closer to implementation, it is time to take a closer look. (more…)
“Debt issuance costs” are costs incurred that would not have been incurred had not an entity procured a new debt instrument – in other words, incremental costs directly related to the new financing. The FASB Accounting Standards Codification (ASC), interestingly, does not define “debt issuance costs”, although the FASB issued two Accounting Standards Updates (ASUs) in 2015 related to presentation of debt issuance costs, with effective dates for nonpublic companies for financial statements covering fiscal years ended in December 2016 or later. (more…)
Recently the men and women at the Financial Accounting Standards Board (FASB) have been busy providing accountants with no shortage of nighttime reading. In the middle of putting the accounting world on its head with the release of the new Revenue Recognition (Topic 606) and Lease (Topic 842) Accounting Standards, the Not-For-Profit Advisory Committee has been hard at work re-tooling the way nonprofits will have to present their financial statements. (more…)
Historically originating through the lens of the independent auditor, whose auditing standards require the auditor to consider “going concern” matters and potentially include cautionary language in the auditor’s report, all companies that issue GAAP-based financial statements are now required to perform their own evaluation and provide explanatory footnote disclosures in defined circumstances. (more…)
By Kay Filler, CPA, Principal
More specifically, FASB issued the final guidance on February 25, 2016, but it’s not required for private companies until 2020 for calendar year companies (although earlier adoption-starting now-is permitted). Sounds like a long way off, but not really when considering potential impacts of the dramatically different accounting model for everyday lease agreements.
New Lease Accounting Rules
But first, here’s a summary of key accounting and disclosure components of the new rules: (more…)
Continuing along on its accounting and reporting simplification efforts (see April 15, 2015 post), on March 30, 2016, the FASB issued ASU No. 2016-09 (ASU) Improvements to Employee Share-Based Payment Accounting. This ASU changes certain accounting requirements, as well as simplifies some of the underlying assumptions and calculations for the accounting measures. Certain provisions apply to all companies, with additional reliefs available only to nonpublic companies. (more…)