Financial Reporting and Regulatory Update

The quarterly Financial Reporting and Regulatory Update is prepared by the Financial Education & Research Foundation (FERF) in collaboration with Crowe LLP, highlighting pronouncements from the U.S. SEC, FASB, PCAOB, and other regulators and standard-setters. Each update includes ASU Effective Date Checklists for Public and Non-Public Business Entities.

Second Quarter 2021

Making SPACs Work

According to the latest figures, more than 400 special-purpose acquisition companies (SPACs) are now in the market seeking private firms to acquire and take them public.

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Financial Reporting & Regulatory Update, Second Quarter 2021

During the second quarter of the 2021 calendar year, the Financial Accounting Standards Board (FASB) issued one new accounting standard on modifications or exchanges of freestanding equity-classified written call options.

The FASB also issued proposals during the quarter addressing the following:

  • Improvements to hedge accounting guidance
  • Discount rate for lessees that are not public business entities

The Securities and Exchange Commission (SEC) released a risk alert on environmental, social, and governance (ESG) investing; provided statements on the alert; provided remarks on ESG reporting; discussed materiality and costs related to ESG disclosures; discussed the London Interbank Offered Rate (LIBOR); addressed special purpose acquisition companies (SPACs); updated guidance on conducting shareholder meetings; reopened the comment period on the universal proxy rule; issued a directive related to proxy voting rules; and updated its regulatory agenda.

The Public Company Accounting Oversight Board (PCAOB) approved the formation of a new standards advisory group and issued documents addressing the staff’s outlook on and audit committee resources for 2021 inspections.

The American Institute of Certified Public Accountants (AICPA) issued working drafts on illustrative financial statements for construction contractors and on accounting issues for insurance entities. The AICPA also updated guidance for healthcare entities.

The Center for Audit Quality (CAQ) published an analysis of ESG reporting, a report on effective governance over ESG reporting, a SPACs alert, and a report on the effectiveness of management review controls.

In addition to these highlights from the quarter, we have included recent developments from the Governmental Accounting Standards Board (GASB).

Checklists for the effective dates of FASB Accounting Standards Updates (ASUs) and GASB statements are provided.