New working draft
CECL implementation guidance for broker-dealers
The AICPA’s Financial Reporting Executive Committee (FinREC) issued a working draft detailing proposed updates to the AICPA Accounting Guide “Brokers and Dealers in Securities.” The proposed guidance addresses implementation of ASC Topic 326.
The proposed updates include the following:
- A new section in Exhibit 6-8, Note 2, “Current Expected Credit Losses (CECL),” with guidance on:
- Financial assets measured at amortized cost basis that are eligible for the collateral maintenance practical expedient and those that are not
- Off balance sheet credit exposures
- Receivables from customers
- Securities borrowed
- Receivables from broker-dealers and clearing organizations
- Updates to Note 9 in Exhibit 6-8 for “Receivable From and Payable to Customers”
- Additions to Chapter 5 to provide guidance for SEC-registered broker-dealers as they develop an accounting policy footnote titled “Financial Instruments – Credit Losses”
Comments were due July 17, 2021.
New TQAs
Accounting for certain grants received under COVID-19 programs
The AICPA, on Aug. 9, 2021, issued a new Technical Question and Answer (TQA), Other Income, Section 5270.01, “Recipient Accounting for Shuttered Venue Operators Grants and Restaurant Revitalization Fund Grants Received Under the Small Business Administration COVID-19 Relief Programs.” The TQA provides guidance on how a recipient should account for a Shuttered Venue Operators Grant (SVOG), which is available to private businesses and not-for-profit entities, or a Restaurant Revitalization Fund (RRF) Grant, which is available only to private business entities. The terms of these grants, which are issued under the Small Business Administration COVID-19 relief programs, do not require recipients to repay the funding as long as funds are used for eligible purposes by the dates stipulated in the programs. TQA 5270.01 presents the differing accounting models that apply, depending on whether the entity is not-for-profit or for-profit.