ASU Effective Dates Checklist

Tax Reform – SEC Accounting and Disclosure Guidance (ASU 2018-05)

Codifies the SEC’s SAB 118, which provides guidance on accounting for income tax effects of the Tax Cuts and Jobs Act (H.R. 1). Provisional amounts should be recorded for tax effects that are incomplete and can be reasonably estimated at the end of the reporting period, and disclosure should accompany the incomplete tax effects.

Share-Based Payment Modification Accounting (ASU 2017-09)

Requires modification accounting when an award’s fair value, vesting provisions, or classification changes subsequent to a modification of the award.

Classification of Deferred Taxes (ASU 2015-17)

Simplifies classification of deferred taxes in a classifi d balance sheet. Classification as noncurrent only is required.

Derivative Novations (ASU 2016-05)

Applies when there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument.

Contingent Puts and Calls on Debt Instruments (ASU 2016-06)

Applies to debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded put or call options. When those options are contingently exercisable, there is no requirement that an entity must assess whether the event that triggers the ability to exercise the options is related to interest rates or credit risks.

Share-Based Payments (ASU 2016-09)

Applies to share-based payment awards issued to employees and offers simplification in several areas including income taxes, forfeitures, minimum statutory tax withholding requirements, cash flow presentation, and practical expedients for nonpublic entities to use intrinsic value measurement for liability-classified awards and to estimate expected term for certain awards.

Not-for-Profit Entities – Financial Statements (ASU 2016-14)

Represents major changes to not-for-profit financial statement presentation standards; focuses on improving the current net asset classification requirements and information presented in financial statements and notes to assess liquidity, financial performance, and cash flows.

Certain Deferred Taxes for Steamship Entities (ASU 2017-15)

Requires steamship entities to recognize any remaining deferred taxes on certain statutory reserve deposits in accordance with Topic 740.

Tax Reform – Reclassification of Stranded Tax Effects in AOCI (ASU 2018-02)

If elected, an entity may reclassify stranded tax effects in AOCI specifically affected by the Tax Cuts and Jobs Act from AOCI to retained earnings, instead of recognizing those effects in earnings.

Revenue Recognition (ASU 2014-09)

For all entities, the transaction- and industry-specific recognition methods are eliminated and revenue is recognized by applying a defined principles-based approach.

Clarifying standards:

ASU 2015-14 – Deferral of Effective Date

ASU 2016-08 – Principal Versus Agent Considerations (Gross Versus Net Reporting)

ASU 2016-10 – Identifying Performance Obligations and Licensing

ASU 2016-11 – Rescission of Certain SEC Guidance in Topic 605 (Staff Announcements at March 3, 2016, EITF Meeting)

ASU 2016-12 – Narrow-Scope Improvements and Practical Expedients

ASU 2016-20 – Technical Corrections and Improvements

ASU 2017-14 – Rescission of SEC SAB Topics 8 and 13 and bill-and-hold guidance; revision of SAB Topic 11.A and SEC guidance for certain vaccine manufacturers

Derecognition and Partial Sales of Nonfinancial Assets (ASU 2017-05)

Primarily applies to the real estate industry but can affect other entities. Clarifies the scope of Subtopic 610-20 by defining an “in substance nonfinancial asset,” and provides guidance on partial sales, such as when an entity retains an equity interest in the entity that owns the transferred nonfinancial assets.

Service Concession Arrangements for Operators of Public Infrastructure (ASU 2017-10)

In all service concession arrangements between a public sector entity and the operator of the public sector entity’s infrastructure, the public sector entity (or the grantor) should be identified as the customer.

Recognition and Measurement (ASU 2016-01)

Applies to the classifi ation and measurement of financial instruments. Removes the available-for-sale category for equities. Equities (excluding equity method and consolidated investments) will be carried at fair value; however, the changes will run through the income statement rather than OCI.

Clarifying standards:

ASU 2018-03 – Clarifications for equity securities without a readily determinable fair value and FVO liabilities

ASU 2018-04 – (SAB 117) Rescission of SEC guidance on AFS equities

Not permitted, except for two provisions

For ASU 2018-03, permitted, including in an interim period, if ASU 2016-01 has been adopted

Breakage for Prepaid Cards (ASU 2016-04)

Applies to prepaid stored-value products that are redeemable for monetary values of goods or services but also may be redeemable for cash, such as certain prepaid gift cards, prepaid telecommunication cards, and traveler’s checks.

Statement of Cash Flows: Certain Clarifications (ASU 2016-15)

Provides guidance on how eight specific cash flows should be classified in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of zerocoupon bonds, contingent consideration payments, insurance settlement proceeds, company- owned life insurance (COLI) policy settlements and premiums, equity method investee distributions, beneficial interests in securitization transactions, and predominance principle for receipts and payments.

Income Taxes for Intra-Entity Asset Transfers (ASU 2016-16)

Applies to asset transfers between legal entities, including related parties (e.g., bank and investment subsidiary); transferor recognizes the current and deferred tax effects when the transfers occur.

Statement of Cash Flows: Restricted Cash (ASU 2016-18)

Requires that restricted cash and cash equivalents be presented in total cash and cash equivalents in the statement of cash flows, and the nature of restrictions on restricted cash and cash equivalents be disclosed.

Definition of a Business (ASU 2017-01)

Applies to the analysis of whether an asset or business is acquired (which determines whether goodwill is recognized), as well as asset derecognition and business deconsolidation transactions.

Employee Benefit Plan Master Trust Reporting (ASU 2017-06)

Applies to disclosures of plans that have an interest in a master trust, which is a trust that a regulated financial institution serves as a trustee or custodian and in which assets of more than one plan sponsored by an employer or employers under common control are held.

Presentation of Net Periodic Pension and Postretirement Benefit Costs (ASU 2017-07)

Rather than reporting pension expense as a net amount, the service cost component will be presented consistent with similar compensation for the same employees, and the other components will be separately presented in the income statement.

Leases (ASU 2016-02)

Revises recognition and measurement for lease contracts by lessors and lessees; operating leases are recorded on the balance sheet for lessees. Replaces Topic 840 with Topic 842.

Clarifying standards:

ASU 2018-01 – Provides a practical expedient in transition to not evaluate existing or expired land easements under Topic 842 that were not previously accounted for as leases under Topic 840.

Premium Amortization on Purchased Callable Debt (ASU 2017-08)

Shortens the amortization period for premiums on purchased callable debt securities to the earliest call date, instead of to the maturity date.

Financial Instruments With Down-Round Features (Part I) and Scope Exception for Certain Mandatorily Redeemable Financial Instruments (Part II)

(ASU 2017-11)

Part I – Simplifies the accounting for certain financial instruments with down-round features by eliminating the requirement to consider the down-round feature in the liability or equity classification determination. For entities that present EPS, requires the effect of the down-round feature in a warrant or other freestanding equity-classified instrument to be presented as a dividend and an adjustment to EPS when it is triggered. Regardless of whether the entity presents EPS, requires the effect of the down-round feature in a convertible instrument such as debt or preferred stock to follow existing guidance for contingent beneficial conversion features and be presented as a discount to the convertible instrument with an offsetting credit to paid-in capital when it is triggered.

Part II – Changes the indefinite deferral available to private companies with mandatorily redeemable financial instruments and certain noncontrolling interests to a scope exception, which does not have an accounting effect.

Hedging Activities (ASU 2017-12)

Expands the nonfinancial and financial risk components that can qualify for hedge accounting and simplifies financial reporting for hedging activities.

Credit Losses (ASU 2016-13)

Replaces the incurred loss model with the current expected credit loss (CECL) model for financial assets, including trade receivables, debt securities, and loan receivables.

Goodwill Impairment Testing (ASU 2017-04)

Removes step two – the requirement to perform a hypothetical purchase price allocation when the carrying value of a reporting unit exceeds its fair value – of the goodwill impairment test.