Diversity in practice led the FASB to revisit the GAAP guidance for the Statement of Cash Flows that has been around since 1987 with the issuance FASB No. 95. Many people thought aspects of these rules were confusing (and contradictory, at times), or even missing entirely. In fact, restatements of public company financial statements often relate to issues with the Statement of Cash Flows (as noted in an earlier post).
Originally planned as a comprehensive project, the FASB altered course to focus efforts on just the most confusing areas, resulting in new guidance covering nine specific issues. The good news is that most of these issues rarely apply to nonpublic tech companies in the Silicon Valley. Eight issues are covered in ASU No. 2016-15 “Classification of Certain Cash Receipts and Cash Payments” issued in August 2016. Several of the issues that might be encountered include handling proceeds from insurance claims, distributions from equity method investees, and contingent consideration payments made after a business combination. Mid-sized companies outside of specific industries would rarely run into the remaining issues. (more…)
My first post about the FASB GAAP Simplification Initiative was in April 2015, and I have posted since then about specific GAAP changes under this umbrella that seemed to bestow the most widespread consequences for companies in Silicon Valley. Now seems like a good time to look back over the past year and a half for other GAAP simplification subjects you might not know about, but are not exactly esoteric topics. (more…)
Historically originating through the lens of the independent auditor, whose auditing standards require the auditor to consider “going concern” matters and potentially include cautionary language in the auditor’s report, all companies that issue GAAP-based financial statements are now required to perform their own evaluation and provide explanatory footnote disclosures in defined circumstances. (more…)
Continuing along on its accounting and reporting simplification efforts (see April 15, 2015 post), on March 30, 2016, the FASB issued ASU No. 2016-09 (ASU) Improvements to Employee Share-Based Payment Accounting. This ASU changes certain accounting requirements, as well as simplifies some of the underlying assumptions and calculations for the accounting measures. Certain provisions apply to all companies, with additional reliefs available only to nonpublic companies. (more…)
My thoughts about ID Theft have always been, “It’ll never happen to me because I am vigilant.” However also, “it sure seems to happen to a lot of people, so is it only a matter time for me?”
These were essentially conflicting thoughts on ID theft I oscillated between until several weeks ago. I have now acquired the label of “ID Theft Victim.” OK, so that is a slight exaggeration…really it is my spouse, but this change in status affects me, as well. (more…)
In a recent post, I summarized many key provisions of the new lease accounting standard, including the effective date and transition requirements. As noted there, even current lease arrangements potentially will impact the results of transition to the new standard, to say nothing of leases executed between now and 2020 (or the date of adoption). (more…)
More specifically, FASB issued the final guidance on February 25, 2016, but it’s not required for private companies until 2020 for calendar year companies (although earlier adoption-starting now-is permitted). Sounds like a long way off, but not really when considering potential impacts of the dramatically different accounting model for everyday lease agreements. But first, here’s a summary of key accounting and disclosure components of the new rules: (more…)
The updated guidance, issued in April 2015, covers fees paid by a customer in a cloud computing arrangement. Guidance for cloud computingvendors (or providers) already existed before this “Simplification Initiative” clarification. For more on the “Simplification Initiative”, see my previous post. This guidance for customers is applicable to private companies beginning with calendar year 2016, although earlier application is allowed. (more…)
Last Spring I wrote in this blog about the FASB’s “Simplification Initiative” (see April 15, 2015 post). Since that time, a number of projects with the premise of simplification have been concluded and several are ongoing. On November 20, 2015, the FASB issued another Accounting Standards Update (ASU) under the umbrella of Simplification that will affect most companies because it relates to Deferred Income Taxes.