bdo knowledge webinar series...accounting update – discussion outline •“big 3” convergence...

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BDO USA, LLP, a Delaware limited liability partnership, is

the U.S. member of BDO International Limited, a UK

company limited by guarantee, and forms part of the

international BDO network of independent member firms.

BDO KNOWLEDGE WEBINAR SERIES

Technical Update – Q2 2014

July 9, 10, or 11, 2014

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CPE AND SUPPORT

CPE Participation Requirements ‒ To receive CPE credit for this webcast:

• You’ll need to actively participate throughout the program.

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certificate from the “Participation” section at the end of the webcast. If you log out before printing your

certificate:

• BDO USA professionals ‒ CPE will automatically be issued in CPE Tracking & Reporting at the end of

every week. A copy of your certificate will be sent after you have been issued credit.

• Clients and Contacts and all other individual participants ‒ You will be emailed instructions on how

to access your certificate.

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CPE AND SUPPORT (CONTINUED) Group Participation ‒ To receive credit:

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LearnLive Participant Guide, which can be found by searching “LearnLive Participant Guide” on the

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LEARNING OBJECTIVES

Upon completion of this course participants will be able to:

• Recognize recently released FASB guidance and

appropriately implement relevant guidance to their

business

• Describe project and proposal stage literature that may

have a broad impact on financial reporting

• Analyze pitfalls in implementing new guidance

• Discuss recent and proposed SEC and PCAOB rulemaking

and activities

mailto:[email protected]

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PRESENTERS

• Accounting Update

Adam Brown, National Assurance Partner, BDO USA, LLP

[email protected]

• SEC Matters Update

Jeff Lenz, National Assurance Partner, BDO USA, LLP

[email protected]

• PCAOB and Other Matters Update

Wendy Hambleton, National Director of SEC Practice, BDO USA, LLP

[email protected]

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Accounting Update




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ACCOUNTING UPDATE – DISCUSSION OUTLINE

• “Big 3” Convergence Projects

o Revenue

o Leases

o Financial Instruments

• Other FASB, EITF and PCC matters

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REVENUE RECOGNITION

• New ASU – May 28th

• Public companies - annual periods

beginning after December 15, 2016,

e.g., 12/31 public companies apply

the standard in the quarter ended

March 31, 2017.

• Nonpublic companies will have an

additional year to adopt.

• Some companies already requesting a

delay.

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REVENUE RECOGNITION

Implementation is underway

• Joint FASB and IASB Transition Resource Group

• SEC staff outreach

• AICPA industry initiative

Resources

• Separate revenue webinar on 7/14 and 7/15:

http://www.bdo.com/acsense/RevenueRecognitionJuly2014/

• Flash Report: http://www.bdo.com/download/3279

• In-depth BDO publication coming this summer…

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LEASES – Q2 DECISIONS

• Variable payments:

o Day 1 - include index-based payments (e.g., CPI escalator)

measurement based on the rate at commencement.

o Day 2 - only reassess when the lease liability is reassessed for other

reasons (e.g., contract modification). Otherwise, changes in the

index are period expenses.

• In-substance fixed payments are included in Day 1 lease liability,

consistent with current practice.

• Discount rate - use the rate implicit in the lease if determinable,

otherwise use incremental borrowing rate.



http://www.bdo.com/download/3279



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• Modification: Any change to contractual terms and conditions of a lease that

was not part of the original terms and conditions of a lease.

o New lease: additional right of use priced on a standalone basis

o Modifications generally require adjustment to the lease asset and liability

without affecting the P&L. However, a reduction of the lease’s scope would

reduce the lease asset and liability, as well as the P&L.

• Contract combinations: multiple contracts should be combined when entered

into with the same counterparty if the contracts are negotiated as a package or

the price in one depends on the other.

• Substitution rights: additional guidance allowing lessees to assume a

substitution right is not substantive if impractical to prove otherwise.

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• Separation: Affirmed the requirement to separate lease and nonlease

components, although lessees may elect to treat entire arrangement as a lease.

• Initial direct costs: includes only incremental costs; internal cost allocations

cannot be capitalized.

• Subleases: intermediate lessor determines classification based on lessor’s

underlying asset.

• BS presentation: Type A and B assets and liabilities cannot be comingled.

Further, lessees should report them separate from other assets and liabilities on

the balance sheet, or disclose them separately in the footnotes.

• CF presentation:

o Lessors: lease inflows are operating

o Lessees: Type A payments split between operating (interest) and financing

(principal). Type B payments are operating.

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FINANCIAL INSTRUMENTS – Q2 DECISIONS • Classification and Measurement

o Retained an unconditional fair value option.

o Changes in “own credit risk” to be presented in OCI for liabilities

subject to FVO.

o The assessment of a valuation allowance for a deferred tax asset

related to an AFS debt security should be made in combination with

the entity’s other deferred tax assets.

o Retained current US GAAP for loan commitments, revolving lines of

credit, and commercial letters of credit.

o Also retained current guidance for foreign currency gains and losses

on debt securities classified as available for sale (not separated in

net income).

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FINANCIAL INSTRUMENTS – Q2 DECISIONS

• Impairment

o Loan subsequently identified for sale – upon reclassification, retain the amortized

cost basis (excluding the allowance for expected credit losses) as the loan’s cost basis

and recognize a valuation allowance equal to the amount by which the amortized cost

basis exceeds fair value.

o Security subsequently identified for sale - adjust its impairment allowance for the

debt security to be equal to the difference between the debt security’s fair value and

its amortized cost basis.

• Certain presentation and disclosure matters were also discussed.

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FASB UPDATE

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FINAL ASUS ISSUED Q2 2014

ASU 2014 - Title FASB EITF

08 Reporting Discontinued Operations and

Disclosures of Disposals of Components of an

Entity

X

09 Revenue from Contracts with Customers X

10 Development Stage Entities: Elimination of

Certain Financial Reporting Requirements,

Including an Amendment to VIE Guidance in

Topic 810, Consolidation

X

11 Repurchase-to-Maturity Transactions,

Repurchase Financings, and Disclosures

X

12 Accounting for Share-Based Payments When

the Terms of an Award Provide That a

Performance Target Could Be Achieved after

the Requisite Service Period

X

http://www.fasb.org/home

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ASU 2014-08: DISCONTINUED OPERATIONS

Changes the criteria for reporting discontinued operations:

• Changes the definition so that only major strategic shifts are reported in

discontinued operations.

• Examples of a strategic shift could include a disposal of a major geographical

area, line of business, equity method investment.

• Revised definition also includes a business or nonprofit activity that, on

acquisition, meets the criteria to be classified as held for sale.

Eliminates extensive continuing involvement test in current GAAP.

Significant amount of new disclosures, including disposals that don’t qualify as

“major”.

Flash Report: http://www.bdo.com/download/3180

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ASU 2014-10: DEVELOPMENT STAGE ENTITIES

Eliminates definition of development stage entity (DSE), as well as the

requirements to:

• Present inception-to date information on the statements of income, cash flows,

and shareholder’s equity

• Label the financial statements as those of a development stage entity

• Disclose a description of the development stage activities in which the entity is

engaged

• Disclose in the first year in which the entity is no longer a development stage

entity.

Eliminates guidance on variable interest entities for DSEs from Topic 810.

Introduces new disclosures of risks & uncertainties under Topic 275.




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ASU 2014-11: REPURCHASE AGREEMENTS

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Current US GAAP ASU 2014-11

Distinguishes between repos and

repos to maturity.

Both required to be treated as

secured borrowings.

Repurchase financing may be

accounted for as a linked

transaction.

Repurchase financing to be

accounted for separately from

initial transfer, resulting in

secured borrowing treatment.

Additional disclosures required for transactions in addition to

those noted above.

Flash report: http://www.bdo.com/download/3302

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ASU 2014-12: PERFORMANCE AWARDS

• Example: Award with two-year service requirement that vests upon an IPO

anticipated in four years.

• Final ASU: Such features should be viewed as performance conditions and

excluded from grant date fair value. Comp charge recognized when

performance is considered “probable.”

o Considered more operational than reflecting in grant date fair value.

o Not expected to change practice for most companies.





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EITF AND PCC UPDATE

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EITF JUNE MEETING

• Final decision: Issue No. 12-G, "Measuring the Financial Assets and the Financial

Liabilities of a Consolidated Collateralized Financing Entity”

o Option to use more observable of assets or liabilities to determine fair value

• Final decision: Issue No. 13-F, "Classification of Certain Government Insured

Residential Mortgage Loans upon Foreclosure“

o Reclassify mortgage loan to other receivable (instead of real estate owned)

o Expanded scope to include fully government-guaranteed non-residential loans

o Also expanded to include partially government-guaranteed loans when the amount to

be received is fixed and determinable

• Issue No. 13-G, "Determining Whether the Host Contract in a Hybrid Financial

Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity“

o No final decisions

o More deliberations planned for September meeting.

• FASB ratification anticipated in July.

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PCC APRIL MEETING

• No final decisions reached at April 29 meeting.

• Discussion topics:

o Intangible assets – exploring approaches for recognizing fewer intangibles

apart from goodwill, particularly customer relationships. Also considering

the impact in an asset acquisition vs. business combination.

o Public business entity – exploring impact of replacing existing “public” and

“private” definition with new PBE definition.

• Next meeting – July 15.

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SEC, PCOAB, and Other

Matters Update

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COMMISSION PROJECTS

• Crowdfunding: http://www.sec.gov/rules/proposed/2013/33-9470.pdf

• Regulation A+: http://www.sec.gov/rules/proposed/2013/33-9497.pdf

• Payments by Resource Extraction Issuers

• Pay Ratio Disclosures:

http://www.sec.gov/rules/proposed/2013/33-9452.pdf

• Other Dodd-Frank Act Rulemaking

• Use of IFRS by Domestic Issuers

• Find a new Chief Accountant

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SEC STAFF ACTIVITIES

• Disclosure Effectiveness (speech at

http://www.sec.gov/News/Speech/Detail/Speech/1370541479332 )

• ASU 2014-08, Reporting Discontinued Operations, vs. Rule 3-15

• ASU 2014-09, Revenue from Contracts with Customers – Implementation

issues










http://www.sec.gov/News/Speech/Detail/Speech/1370541479332

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SEC FOCUS ON FINANCIAL AREAS

• Task Forces formed in 2013 to focus on fraud

• Issues from outcomes of data analysis

o Using XBRL data

• Focus on internal controls

• In FY 2103 17.2% of whistleblower complaints were related to corporate

disclosures and financials

• Focus on “gatekeepers” as well as companies/executives

• Action against audit committee members

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PCAOB UPDATE

Standard Setting Update:

• Audit standard on related parties –

• Planned effective date years beginning after December 15, 2014

• Needs SEC approval to become effective

• Projects for July –December 2014

o Disclosure of engagement partner and other participants

o Auditing accounting estimates

o Auditor’s responsibilities with respect to other accounting firms, individual

accountant and specialists

• Other project – going concern

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AS 18 RELATED PARTIES

• Relationships and transactions with related parties

o Obtain an understanding of RP transactions

o Evaluate if company has properly identified

o Perform specific procedures

o Communicate with AC

• Significant and unusual transactions

o Identify and obtain an understanding

o Fraud considerations

• Financial relationships and transactions with executive officers

2013 USGAAP UPDATE

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ADDITIONAL WEBINARS

BDO Knowledge Webinar Archives:

• Data Breach Essentials (June 2014)

• COSO 2013 Framework – Preparing for Implementation (May 2014)

• Recovering from Deepwater Horizon – There’s Still Time to File (April

2014)

http://www.bdo.com/acsense/archive.aspx

BDO Knowledge Upcoming Webinars:

• Revenue Recognition: Overview of New ASU 2014-09 – July 14 or 15,

2014

http://www.bdo.com/acsense/

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http://www.bdo.com/acsense/archive.aspx

http://www.bdo.com/acsense/

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BDO BOARD REFLECTIONS Additional resources accessible via the BDO Board Reflections:

http://www.bdo.com/library/boardreflections.aspx

Recent BDO Publications:

• FASB Flash Reports

• 2013 COSO Internal Control – Integrated Framework – Update on Implementation

Considerations

• BDO Guide to Going Public

• BDO Board Reflections: Perspectives on Executive Succession Planning

• Cybersecurity – Its Impact on the External Audit and Other Recent Developments

• Cybersecurity – A Board Primer

• Private Company Council (PCC) Flash Reports

• Significant Accounting and Reporting Matters Guide

For a complete listing of publications, refer to:

http://www.bdo.com/publications/assurance/

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EVALUATION

We continually try and improve our programming and appreciate

constructive feedback.

Following the program, we will be sending out a thank you e-mail that

contains a link to a brief evaluation.

Thank you in advance for your participation!

http://www.bdo.com/library/boardreflections.aspx

http://www.bdo.com/publications/assurance/

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CONCLUSION THANK YOU FOR YOUR PARTICIPATION!

Certificate Availability: If you participated the entire time and responded to at least 75% of

the participation pop-ups, click the “Participation” button below to access the print

certificate button.

Group Participation Reminder ‒ to receive credit:

Sign-in sheets must list a Proctor name and CPA license number.

BDO USA professionals - submit your sign-in sheets using a Training & Development Request in

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“Service Catalog” in the left menu, then under Training & Development, “Make a Request”.

Clients and Contacts – email sign-in sheets to [email protected] within 24 hours of the webcast.

Alliance Members ‒ should proctor their own group participants. This process is detailed in the

LearnLive Participant Guide on Alliance Portal > Resource Center. Call LearnLive Support for

questions at 1-888-228-4088.

Unfortunately, we cannot currently support group CPE for International Firms. Those wanting CPE

must have registered and participated from their own computer.

Please exit the course by clicking on the red “X” in the upper right corner.

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APPENDIX Effective Dates of U.S. Accounting Pronouncements


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ACCOUNTING PRONOUNCEMENTS EFFECTIVE DATES PRONOUNCEMENT EFFECTIVE DATE – PUBLIC EFFECTIVE DATE – NON PUBLIC

ASC 205, Presentation of Financial Statements

ASU 2013-07, Liquidation Basis of

Accounting Effective for entities that

determine liquidation is

imminent during annual

reporting periods beginning

after December 15, 2013. Early

adoption is permitted.

Effective for entities that

determine liquidation is

imminent during annual




ASC 220, Comprehensive Income

ASU 2013-01, Reporting of Amounts

Reclassified Out of Accumulated

Other Comprehensive Income

Effective prospectively for


after 12/15/2012.



after 12/15/2013. Early


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ASC 205, Presentation of Financial Statements and ASC 360, Property, Plant, and Equipment

ASU 2014-08, Reporting

Discontinued Operations

and Disclosures of Disposals

of Components of an Entity

Effective for annual periods

beginning on or after December

15, 2014, and interim periods

within those years.

Entities should not apply the

amendments to a component of

an entity (or a business or

nonprofit activity) that is

classified as held for sale before

the effective date even if it is

disposed of after the effective

date. That is, the ASU must be

adopted prospectively. Early

adoption is permitted, but only

for disposals (or classifications as

held for sale) that have not been

previously reported in the

financial statements.

Effective for annual periods beginning

on or after December 15, 2014, and

interim periods within annual periods

beginning on or after December 15,

2015.

Entities should not apply the

amendments to a component of an

entity (or a business or nonprofit

activity) that is classified as held for

sale before the effective date even if it

is disposed of after the effective date.

That is, the ASU must be adopted

prospectively. Early adoption is

permitted, but only for disposals (or

classifications as held for sale) that

have not been previously reported in

the financial statements.

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ASC 230, Statement of Cash Flows

ASU 2012-05, Not-for-Profit

Entities: Classification of the Sale

Proceeds of Donated Financial Assets

in the Statement of Cash Flows (a

consensus of the FASB Emerging

Issues Task Force)

Not applicable to public

entities.

Effective prospectively for fiscal

years, and interim periods

within those years, beginning

after 6/15/2013. Retrospective

application to all prior periods

presented upon the date of

adoption is permitted. Early

adoption from the beginning of

the fiscal year of adoption is

permitted. For fiscal years

beginning before 10/22/2012,

early adoption is permitted only

if an NFP’s financial statements

for those fiscal years and

interim periods within those

years have not yet been made

available for issuance.

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ASC 310, Troubled Debt Restructuring by Creditors

ASU 2014-04, Reclassification of

Residential Real Estate collateralized

consumer Mortgage Loans upon

Foreclosure (a consensus of the FASB

Emerging Issues Task Force)

Effective for annual periods and


annual periods, beginning after

December 15, 2014. Early

adoption is permitted. An

entity can elect to adopt the

amendments in this update

using either a modified

retrospective transition method

or a prospective transition

method.


beginning after December 15,

2014, and interim periods

within annual periods beginning


adoption is permitted. An

entity can elect to adopt the

amendments in this update

using either a modified

retrospective transition method

or a prospective transition

method.

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ASC 323, Investments – Equity Method and Joint Ventures

ASU 2014-01, Accounting for

Investments in Qualified Affordable

Housing Projects (a consensus of the

FASB Emerging Issues Task Force)


interim reporting periods within

those annual periods, beginning


adoption is permitted. If

adopted, the amendments in

this Update should be applied

retrospectively to all periods

presented. A reporting entity

that uses the effective yield

method to account for its

investments in qualified

affordable housing projects

before the date of adoption

may continue to apply the

effective yield method for those

preexisting investments.




within annual reporting periods


2015. Early adoption is

permitted. If adopted, the

amendments in this Update

should be applied


presented. A reporting entity

that uses the effective yield

method to account for its

investments in qualified

affordable housing projects

before the date of adoption

may continue to apply the

effective yield method for those

preexisting investments.

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ASC 350, Intangibles – Goodwill and Other

ASU 2014-02, Accounting for

Goodwill (a consensus of the Private

Company Council)


entities.

The accounting alternative, if

elected, should be applied

prospectively to goodwill

existing as of the beginning of

the period of adoption and new

goodwill recognized in annual

periods beginning after

December 15, 2014, and interim

periods within annual periods


2015. Early application is

permitted, including application

to any period for which the

entity’s annual or interim

financial statements have not

yet been made available for

issuance.

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ASC 405, Liabilities

ASU 2013-04, Obligations Resulting

from Joint and Several Liability

Arrangements for Which the Total

Amount of the Obligation Is Fixed at

the Reporting Date (a consensus of

the FASB Emerging Issues Task Force)

Effective for fiscal years, and


years, beginning after

12/31/2013. Early adoption is

permitted. Retrospective

application is required for all

periods presented. Entities are

permitted to use hindsight when

determining the appropriate

amount to be recorded in prior

periods.

Effective for fiscal years ending

after 12/31/2014 and interim

and annual periods thereafter.

Early adoption is permitted.

Retrospective application is

required for all periods

presented. Entities are

permitted to use hindsight when

determining the appropriate

amount to be recorded in prior

periods.

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ASC 606, Revenue

ASU 2014-09,

Revenue from

Contracts with

Customers

Effective for annual periods beginning after

December 15, 2016, including interim periods

therein. Three basic transition methods are

available – full retrospective, retrospective with

certain practical expedients, and a cumulative

effect approach. Under the this alternative, an

entity would apply the new revenue standard only

to contracts that are incomplete under legacy

U.S. GAAP at the date of initial application (e.g.

January 1, 2017) and recognize the cumulative

effect of the new standard as an adjustment to

the opening balance of retained earnings. That

is, prior years would not be restated and

additional disclosures would be required to enable

users of the financial statements to understand

the impact of adopting the new standard in the

current year compared to prior years that are

presented under legacy U.S. GAAP. Early adoption

is prohibited.



2017. In addition, the new

standard is effective for interim


that begin after December 15,

2018. The same three transition

alternatives apply. There are

certain provisions that allow for

nonpublic entities to early adopt.

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ASC 718, Compensation—Stock Compensation

ASU 2014-12,

Accounting for

Share-Based

Payments When

the Terms of an

Award Provide

That a

Performance

Target Could Be

Achieved after

the Requisite

Service Period (a

consensus of the

FASB Emerging

Issues Task Force)

Effective for annual periods and interim

periods within those annual periods

beginning after December 15, 2015.

Earlier adoption is permitted.

Entities may apply the amendments in this

Update either (a) prospectively to all

awards granted or modified after the

effective date or (b) retrospectively to all

awards with performance targets that are

outstanding as of the beginning of the

earliest annual period presented in the

financial statements and to all new or

modified awards thereafter. If

retrospective transition is adopted, the

ASU specifies additional transition

considerations.

Effective for annual periods and interim

periods within those annual periods

beginning after December 15, 2015.

Earlier adoption is permitted.

Entities may apply the amendments in

this Update either (a) prospectively to

all awards granted or modified after the

effective date or (b) retrospectively to

all awards with performance targets that

are outstanding as of the beginning of

the earliest annual period presented in

the financial statements and to all new

or modified awards thereafter. If

retrospective transition is adopted, the

ASU specifies additional transition

considerations.

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ASC 720, Other Expenses

ASU 2011-06, Fees Paid to the

Federal Government by Health

Insurers (a consensus of the FASB

Emerging Issues Task Force)

Effective for calendar years

beginning after 12/31/2013,

when the fee initially becomes

effective.

Effective for calendar years

beginning after 12/31/2013,

when the fee initially becomes

effective.

ASC 740, Income Taxes

ASU 2013-11, Presentation of an

Unrecognized Tax Benefit When a Net

Operating Loss Carryforward, a

Similar Tax Loss, or a Tax Credit

Carryforward Exists (a consensus of


Effective for fiscal years, and





Effective for fiscal years and





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ASC 810, Consolidation

ASU 2014-07, Applying Variable

Interest Entities Guidance to

Common Control Leasing

Arrangements (a consensus of the

Private Company Council)


entities.

If elected, the accounting

alternative is effective for

annual periods beginning after

December 15, 2014, and interim



2015. Early application is

permitted, including application

to any period for which the

entity’s annual or interim

financial statements have not

yet been made available for

issuance. The accounting

alternative should be applied


presented. Prospective

adoption is not permitted.

Page 46


ASC 810, Consolidation

ASU 2014-10,

Elimination of

Certain Financial

Reporting

Requirements,

Including an

Amendment to

Variable Interest

Entities Guidance in

Topic 810,

Consolidation

Consolidation update – Effective for

annual reporting periods beginning

after December 15, 2015 and interim

periods therein.

The amendments apply retrospectively

and also generally incorporate the

transition provisions of Statement 167

to address situations in which it may

not be practicable to obtain the

necessary information for prior years.

Early adoption is permitted for

financial statements that have not yet

been issued or made available for

issuance.

See also ASC 915, Development Stage

Entities.

Consolidation update – Effective for

annual reporting periods beginning after

December 15, 2016 and interim reporting

periods beginning after December 15,

2017.

The amendments apply retrospectively

and also generally incorporate the

transition provisions of Statement 167 to

address situations in which it may not be

practicable to obtain the necessary

information for prior years.

Early adoption is permitted for financial

statements that have not yet been issued

or made available for issuance.

See also ASC 915, Development Stage

Entities.

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ASC 815, Derivatives and Hedging

ASU 2014-03, Accounting for Certain

Receive-Variable, Pay-Fixed Interest

Rate Swaps – Simplified Hedge

Accounting Approach (a consensus of

the Private Company Council)


entities.

If elected, the simplified hedge

accounting approach will be

effective for annual periods





adoption is permitted, and

private companies are able (but

not required) to adopt the new

standards for December 31,

2013 year-end financial

statements that are not yet

available for issuance. Private

companies have the option to

apply the amendments in this

Update using either a modified

or full retrospective approach.

Page 48


ASC 815, Derivatives and Hedging

ASU 2013-10, Inclusion of the Fed

Funds Effective Swap Rate (or

Overnight Index Swap Rate) as a

Benchmark Interest Rate for hedge

Accounting Purposes (a consensus of



qualifying new or redesignated

hedging relationships entered

into on or after July 17, 2013.


qualifying new or redesignated

hedging relationships entered

into on or after July 17, 2013.

ASC 820, Fair Value Measurement

ASU 2013-09, Deferral of the

Effective Date of Certain Disclosures

for Nonpublic Employee Benefit Plans

in Update no 2011-04


entities.

Effective upon issuance for

financial statements that have

not been issued.

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ASC 830, Foreign Currency Matters

ASU 2013-05, Parent’s Accounting

for the Cumulative Translation

Adjustment upon Derecognition of

Certain Subsidiaries or Groups of

Assets within a Foreign Entity or of

an Investment in a Foreign Entity (a


Issues Task Force)

Effective prospectively for all

entities with derecognition

events after the effective date.

The guidance is effective for

fiscal years, and interim periods

within those years, beginning


adoption is permitted. If early

adoption is elected, the

guidance should be applied as

of the beginning of the entity’s

fiscal year of adoption.

Effective prospectively for all

entities with derecognition

events after the effective date.

The guidance is effective for

fiscal years beginning after

12/31/2014 and interim and

annual periods thereafter. Early

adoption is permitted. If early

adoption is elected, the

guidance should be applied as

of the beginning of the entity’s

fiscal year of adoption.

Page 50


ASC 853, Service Concession Arrangements

ASU 2014-05, Service Concession

Arrangements (a consensus of the

FASB Emerging Issues Task Force)



annual periods beginning after


adoption is permitted. The

amendments should be applied

on a modified retrospective

basis, to all arrangements

existing at the beginning of the

fiscal year of adoption and to

all arrangements entered into

after that date.






adoption is permitted. The

amendments should be applied

on a modified retrospective

basis, to all arrangements

existing at the beginning of the

fiscal year of adoption and to

all arrangements entered into

after that date.

26

Page 51


ASC 860, Transfers and Servicing

ASU 2014-11, Repurchase-to-

Maturity Transactions, Repurchase

Financings, and Disclosures

The accounting changes and

disclosure for certain

transactions accounted for as a

sale are effective for the first

period (interim or annual)


2014. Earlier application for a

public business entity is

prohibited. The disclosure for

transactions accounted for as

secured borrowings is required

for annual periods beginning

after December 15, 2014, and

for interim periods after March

15, 2015.

The accounting changes and

both new disclosures are

effective for annual periods


2014 and interim periods after

December 15, 2015. These

entities may elect early

application and apply the

requirements for interim

periods beginning after

December 15, 2014.

Page 52


ASC 915, Development Stage Entities

ASU 2014-10,

Elimination of

Certain Financial

Reporting

Requirements,

Including an

Amendment to

Variable Interest

Entities Guidance

in Topic 810,

Consolidation

DSE requirements – Effective for annual

reporting periods beginning after

December 15, 2014 and interim periods

therein. While the elimination of the

DSE financial reporting requirements

applies retrospectively, the new

disclosures about related risks and

uncertainties are required

prospectively.

Early adoption is permitted for

financial statements that have not yet

been issued or made available for

issuance.

See also ASC 810, Consolidation.

DSE requirements – Effective for annual

reporting periods beginning after

December 15, 2014, and interim periods

beginning after December 15, 2015. While

the elimination of the DSE financial

reporting requirements applies

retrospectively, the new disclosures about

related risks and uncertainties are

required prospectively.

Early adoption is permitted for financial

statements that have not yet been issued

or made available for issuance.

See also ASC 810, Consolidation.

27

Page 53


ASC 926, Entertainment - Films

ASU 2012-07, Accounting for Fair

Value Information That Arises after

the Measurement Date and its

Inclusion in the Impairment Analysis

of Unamortized Film Costs (a


Issues Task Force)

Effective for impairment

assessments performed on or

after 12/15/2012. The

amendments resulting from this

Issue should be applied

prospectively. In addition,

earlier application is permitted,

including for impairment

assessments performed as of a

date before 10/24/2012, if, for

SEC filers, the entity’s financial

statements for the most recent

annual or interim period have

not yet been issued.

Effective for impairment

assessments performed on or

after 12/15/2013. The

amendments resulting from this

Issue should be applied

prospectively. In addition,

earlier application is permitted,

including for impairment

assessments performed as of a

date before 10/24/2012, if

interim period financial

statements have not yet been

issued or, for all other entities,

have not yet been made

available for issuance.

Page 54


ASC 946, Financial Services – Investment Companies

ASU 2013-08, Financial Services –

Investment Companies (Topic 946):

Amendments to the Scope

measurement and Disclosure

Requirements

Effective for an entity’s interim

and annual reporting periods in

fiscal years that begin after

12/15/2013. Earlier application

is prohibited.

Effective for an entity’s interim

and annual reporting periods in

fiscal years that begin after

12/15/2013. Earlier application

is prohibited.

ASC 954, Health Care Entities

ASU 2012-01, Continuing Care

Retirement Communities –

Refundable Advance Fees

Effective for fiscal years

beginning after 12/15/2012.

Early adoption is permitted.

Entities must apply the

requirements retrospectively by

recording a cumulative-effect

adjustment to opening retained

earnings (or unrestricted assets)

as of the beginning of the

earliest period presented.

Effective for fiscal years ending


adoption is permitted. Entities

must apply the requirements

retrospectively by recording a

cumulative-effect adjustment

to opening retained earnings (or

unrestricted assets) as of the

beginning of the earliest period

presented.

28

Page 55


ASC 958, Not-for-Profit Entities

ASU 2013-06, Services Received

from Personnel of an Affiliate


entities.

Effective prospectively for fiscal

years beginning after June 15,

2014, and interim and annual

periods thereafter. A recipient

not-for-profit entity may apply

the amendments using a

modified retrospective

approach under which all prior

periods presented upon the

date of adoption should be

adjusted, but no adjustment

should be made to the

beginning balance of net assets

of the earliest period

presented. Early adoption is

permitted.

Page 56


Other Topics

ASU 2014-06, Technical Corrections

and Improvements Related to the

Glossary Terms

The amendments resulting from

this Update do not have

transition guidance and will be

effective upon issuance.

The amendments resulting from

this Update do not have

transition guidance and will be

effective upon issuance.

ASU 2013-12, Definition of a Public

Business Entity (An Addition to the

Master Glossary)

There is no actual effective

date for the amendment in this

Update. However, the term

public business entity will be

used in Accounting Standards

Updates No. 2014-01 and 2014-

02, which are the first Updates

that will use the term public

business entity.

There is no actual effective

date for the amendment in this

Update. However, the term

public business entity will be

used in Accounting Standards

Updates No. 2014-01 and 2014-

02, which are the first Updates

that will use the term public

business entity.

29

Page 57


Other Topics

ASU 2012-04, Technical Corrections

and Improvements

The amendments in this Update

that do not have transition

guidance are effective upon

issuance for both public entities

and nonpublic entities. The

amendments that are subject to

the transition guidance will be

effective for fiscal periods


The amendments in this Update

that do not have transition

guidance are effective upon

issuance for both public entities

and nonpublic entities. The

amendments that are subject to

the transition guidance will be

effective for fiscal periods


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