Month: February 2018

To the Point – FASB issues guidance on reclassification from OCI of tax effects related to tax reform

Go to Source Author: The FASB issued an Accounting Standards Update that will permit entities to reclassify tax effects stranded in accumulated other comprehensive income (OCI) as a result of tax reform to retained earnings. The final guidance gives entities the option to reclassify these amounts, but requires new disclosures, regardless of whether they elect to do so. The guidance is effective for fiscal years beginning after 15 December 2018, and interim periods within those fiscal years. Early adoption in any period is...

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Financial Reporting Developments – Business combinations

Go to Source Author: We have updated our Financial reporting developments (FRD) publication on business combinations to include interpretive guidance on how to apply the recognition and measurement principles in ASC 805 to acquired contracts with customers that are accounted for under ASC 606. Refer to Appendix H of the publication for a summary of the...

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Guide to preparing carve-out financial statements

Go to Source Author: When a company is planning to divest all or a portion of a business, financial statements reflecting the operations to be divested may be needed to comply with regulatory requirements, to enable the seller and the buyer to evaluate the potential transaction or to obtain financing. In practice, such financial statements are often referred to as carve-out financial statements. Our publication provides accounting and reporting guidance to help companies prepare carve-out financial...

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Comment letter – FASB proposal to add a transition option and practical expedient for lessors to the new leases standard

Go to Source Author: In our comment letter, we supported the FASB’s efforts to reduce the cost and complexity of applying the guidance in ASC 842, Leases. However, we believe the Board could provide additional relief by giving entities the option to use an alternative transition method that would allow them to apply the recognition and subsequent measurement guidance in ASC 842 to existing leases at the date of initial application. In addition, we expressed concern that the proposed criteria for use of the lessor practical expedient would inadvertently limit the population of leases to which the practical expedient could be...

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To the Point – FASB moves ahead with guidance on reclassification of tax effects stranded in OCI by tax reform

Go to Source Author: The FASB decided to finalize guidance that would permit entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform to retained earnings and directed the staff to draft a final Accounting Standards Update. The FASB decided to give entities the options to (1) reclassify these amounts rather than require reclassification and (2) apply the guidance retrospectively or in the period of...

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