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.

Fourth Quarter 2019

How Trade Challenges Affect the Manufacturing Industry

The Financial Education and Research Foundation talked with Doug Schrock, managing principal of the Crowe’s manufacturing and distribution (M&D) services group about the outlook for the sector in the New Year.
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Financial Reporting & Regulatory Update, Fourth Quarter 2019

During the fourth quarter of the 2019 calendar year, the Financial Accounting Standards Board (FASB) issued new accounting standards on the following topics:

  • Simplifying accounting for income taxes
  • Narrow-scope improvements to the credit losses standard
  • Deferral of effective dates for certain entities for credit impairment, leases, hedging, and long-duration contracts guidance
  • Improvements to share-based consideration payable to a customer

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

  • Various codification improvements
  • Transition guidance for reference rate reform
  • Improvements to hedge accounting

The Securities and Exchange Commission (SEC) participated in the annual American

Institute of CPAs(AICPA) Conference on Current SEC and PCAOB Developments in December, issued guidance on estimates of current expected credit losses, proposed to adopt resource extraction disclosures, proposed to update the definition of accredited investor, and proposed to amend the proxy rules.

The Public Company Accounting Oversight Board (PCAOB) issued its five-year strategic plan, released a spotlight report on critical audit matters (CAMs), posted a report on conversations with audit committees, and released a concept release on quality control standards.

The AICPA issued a practice aid on accounting for and auditing of digital assets, two working drafts addressing credit losses standard implementation issues, and a new Statement on Auditing Standards and new Statement on Standards for Attestation Engagements that align the AICPA concept of materiality with the PCAOB, the SEC,  the FASB, and the U.S. judicial system.

The Center for Audit Quality (CAQ) released its audit committee transparency barometer in the fourth quarter and published information on the auditors’ role in company-prepared information. It also issued a request for auditing-related research topics.

Also included are 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 in the appendix.