Audit & Accounting Update: October 2019

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Accounting

Proposed guidance related to classifying debt as current or noncurrent
The FASB has issued a revised proposal on classifying debt as current or noncurrent at the balance-sheet date.
The Financial Accounting Standards Board (FASB) recently issued a proposed Accounting Standards Update (ASU), Debt (Topic 470): Simplifying the Classification of Debt in a Classified Balance Sheet (Current versus Noncurrent). This proposed ASU reflects revisions to the original proposed ASU issued on the topic in January 2017.

Proposed accounting guidance for the effects of reference rate reform
The FASB recently issued a proposal on the accounting for reference rate reform (e.g., the planned discontinuation of LIBOR).
If finalized, the proposed ASU would provide guidance on how entities should account for changes to certain contracts, hedging relationships and other transactions affected by reference rate reform, including the planned discontinuation of the London Interbank Offered Rate (LIBOR). LIBOR is commonly referenced in loans, debt instruments, leases and interest rate derivatives.

Proposed guidance related to classifying debt as current or noncurrent

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Audit & Accounting Update: July 2019

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Accounting

Updated guide to revenue recognition
We have issued an updated version of our guide to revenue recognition to further assist middle-market companies in applying the new revenue recognition model in Topic 606 with recent activities of the FASB, AICPA and SEC. The guide has been updated for recent developments, including activities of the:

  • FASB, such as the issuance of new Accounting Standards Updates and non-authoritative guidance related to the implementation of ASC 606
  • AICPA, such as the issuance of its revenue recognition guide
  • SEC, such as speeches by SEC staff during the 2018 AICPA Conference on Current SEC and PCAOB Developments, which articulated their views on certain aspects of ASC 606

Updates to our hedging guide for ASU 2019-04
We recently updated our hedging guide for the clarifications made by FASB Accounting Standards Update 2019-04, including those related to having multiple separately designated partial-term fair value hedging relationships of a single financial instrument outstanding at the same time. This summary includes discussion of the effective date and transition provisions of ASU 2019-04 for situations in which ASU 2017-12 has already been adopted and situations in which ASU 2017-12 has not yet been adopted.

business man reading updated guide to revenue recognition

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

What Non-Profits Need to Know About ASU 2018-08

The Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) 2018-08. This update improves and clarifies the guidance regarding contributions received and contributions made.

The board found that there was a lack of clarity and consistency in how grants and contracts were characterized as either exchanges or contributions. In addition, they found that non-profit organizations differed in how they determined if contributions were conditional or unconditional.

“That’s important because that distinction between conditional vs. unconditional impacts the pattern of revenue recognition,” said Christine Botosan, FASB Board Member.

top tab folder labeled grants related to ASU 2018-08

ASU 2018-08 provides criteria for determining between exchanges or contributions by looking at whether the provider is receiving commensurate value in return for resources transferred. This clarification will help organizations determine if the transfer should be treated as a contribution (nonreciprocal transaction) or an exchange (reciprocal) transaction.

Note that the “commensurate value” described above is value to the provider, not to the general public. So, funds transferred from New York State would be considered a contribution unless New York State itself receives commensurate value.

If commensurate value is not provided, the organization should determine if the transaction is a third-party payment for an existing exchange transaction (such as Medicare, Medicaid, Pell Grant, etc.) If commensurate value is not provided, and the transaction isn’t a third-party payment, it should be accounted for as a contribution.

The ASU also provides additional detail on how to distinguish conditional contributions from unconditional contributions, as well as the difference between donor-imposed conditions and donor-imposed restrictions. Conditional contributions must include a barrier that must be overcome and a right of return or right of release. If a contribution is determined to be unconditional, it must be analyzed to determine if it is restricted or unrestricted.

ASU 2018-08 applies primarily to non-profit organizations, however it can apply to organizations that receive or make contributions of cash and other assets, including businesses. It does not apply to transfers of assets from governments to businesses.

The amendments in this ASU are effective for reporting periods beginning after June 15, 2018 for non-profit organizations and public companies serving as resource recipients (and December 15, 2018 for other organizations). For non-profit organizations serving as resource providers, the amendments are effective for reporting periods beginning after December 15, 2018 (and December 15, 2019 for other organizations.) Early adoption is permitted.

For more information on ASU 2018-08, visit https://www.fasb.org/home.

For more information on Insero’s non-profit solutions, visit https://inserocpa.com/clients/non-profits.html or contact us today.

Audit & Accounting Update: October 12, 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Webcast: Health care industry revenue recognition
Our webcast will address health care industry matters that are relevant when implementing the new revenue recognition guidance.

Short-duration contract disclosures: An overview of ASU 2015-09
Our whitepaper discusses the disclosure requirements of ASU 2015-09 and certain related key implementation considerations.

Proposed reorganization of consolidation guidance
The FASB has proposed to reorganize, and clarify certain areas of, Accounting Standards Codification Topic 810, “Consolidation.”

Audit and Accounting Updates for Business Owners and Financial Professionals

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Audit & Accounting Update: August 24, 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Revenue recognition resources updated for recent developments
We have updated our revenue recognition resources for recent developments related to the new revenue recognition guidance.

Proposed clarifying guidance for contributions received and made
To clarify the accounting guidance for contributions received and contributions made, the FASB recently issued a proposed ASU.

Audit and Accounting Updates for Business Owners and Financial Professionals

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Audit & Accounting Update: May 24, 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Stock compensation: Scope of modification accounting
ASU 2017-09 requires an entity to account for the effects of a share-based payment award modification unless certain conditions are met.
Read more

Customer of operation services in a service concession arrangement
Per the FASB, the grantor is the customer of the operation services for service concession arrangements within the scope of ASC 853.
Read more

FASB tentative decisions regarding down round features
The FASB recently completed its redeliberations regarding the accounting for certain financial instruments with down round features.
Read more

Questions regarding ASU 2015-12
Employee benefit plan administrators commonly have raised three questions related to the implementation of ASU 2015-12.
Read more

 

Audit and Accounting Updates for Business Owners and Financial Professionals

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Audit & Accounting Update: April 27, 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Premium amortization on purchased callable debt securities
A recent ASU requires the premium on certain callable debt securities to be amortized to the earliest call date.
Read more

Changes to revenue recognition impacting insurance entities
Our whitepaper discusses changes to revenue recognition impacting third-party administrators, agents and brokers in the insurance sector.
Read more

Auditor’s consideration of ability to continue as a going concern
A new standard provides some revised guidance on the auditor’s consideration of an entity’s ability to continue as a going concern.
Read more

Proposed revisions to Government Auditing Standards
The United States Government Accountability Office is seeking comment on its 2017 Exposure Draft of Government Auditing Standards.
Read more

SEC makes inflation adjustments to certain JOBS Act rules
The SEC recently made inflation adjustments to certain Jumpstart Our Business Startups Act rules, and other technical amendments.
Read more

Proposed improvements to IFRS 8
If finalized, recent proposed amendments would make revisions to International Financial Reporting Standard 8, Operating Segments.
Read more

 

Audit and Accounting Updates for Business Owners and Financial Professionals

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Audit & Accounting Update: March 9, 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Changes to revenue recognition for financial institutions
In our whitepaper, we discuss the relevance of the FASB’s new guidance for certain categories of revenue for financial institutions.
Read more

Clarification of derecognition guidance for nonfinancial assets
FASB ASU 2017-05 clarifies the scope of asset derecognition guidance and the accounting for partial sales of nonfinancial assets.
Read more

FASB’S ongoing efforts to simplify hedge accounting
Our article highlights decisions made at the February FASB meeting related to its ongoing efforts to simplify hedge accounting.
Read more

 

Audit and Accounting Updates for Business Owners and Financial Professionals

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Audit & Accounting Update: February 9, 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Updates to revenue recognition resources for ASU 2016-20
We have updated our revenue recognition resources to reflect the changes made by Accounting Standards Update 2016-20.
Read more

Are you sure you know when the revenue guidance in ASC 606 is effective?
Our article discusses certain factors to be carefully considered in determining when ASC 606 is effective for you.
Read more

New credit losses standard in a nutshell
Our summary provides brief answers to certain key questions regarding the FASB’s new standard on credit losses.
Read more

Valuing management incentive units
Our whitepaper discusses various issues related to the valuation of and accounting for management incentive units.
Read more

FASB simplifies the test for goodwill impairment
The FASB has simplified how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test.
Read more

Accounting ramifications related to centrally cleared derivatives
A change in the legal characterization of margin payments has accounting and disclosure ramifications for impacted entities.
Read more

FASB’s ongoing efforts to simplify hedge accounting
The FASB recently met to discuss feedback received on proposed targeted improvements to simplify hedge accounting.
Read more

Audit and Accounting Updates for Business Owners and Financial Professionals

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Audit & Accounting Update: January 26, 2017

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Changes to revenue recognition in the technology industry 
Our white paper discusses how certain issues will significantly affect revenue recognition in the technology industry.
Read more

Clarifications to definition of a business
The FASB recently issued clarifications to the definition of a business, which affects many areas of accounting.
Read more

Consolidation of for-profit limited partnership by not-for-profit entity
ASU 2017-02 clarifies when a not-for-profit entity that is a general partner should consolidate a for-profit limited partnership.
Read more

Proposal: Balance sheet classification of debt
A recent proposed ASU introduces an overarching principle for determining whether debt should be classified as current or noncurrent.
Read more

Proposed changes to disclosure requirements for inventory
If finalized, recent proposed amendments to FASB ASC Topic 330 would require additional inventory disclosures.
Read more

FASB makes additional corrections to new revenue guidance
A recent FASB Accounting Standards Update makes technical corrections to ASC Topic 606, Revenue from Contracts with Customers.
Read more

Tool for audit committees: Preparing for the revenue recognition standard
A new Center for Audit Quality tool aims to help audit committees assess a company’s implementation of the new revenue recognition standard.
Read more

 

Audit and Accounting Updates for Business Owners and Financial Professionals

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.