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1. Reducing unnecessary complexity remains a key focus of FASB   WebExclusive

BY Ken Tysiac
Taking unnecessary cost and complexity out of the U.S. financial reporting system has been a primary objective for Russell Golden since he became FASB’s chairman in July 2013.FASB plans to continue its efforts to reduce complexity—while maintaining usefulness of reporting to financial statement users—in the coming years, Golden said Tuesday during a speech at the AICPA fall Council meeting in Boston.Recent FASB efforts at simplifying financial reporting have included:Expanding the scope of Private Company Council (PCC) issues to include discussion by FASB of public company applicability in areas such as accounting for development stage entities—which resulted in

2. How NFPs should allocate joint costs  

BY Joseph W. Cruitt, CPA, CGMA
Not-for-profit entities (NFPs) are under constant pressure to devote an increasing portion of their expenditures to accomplishing their mission programs. While this goal sounds appealing, the NFP must also perform management activities to operate the NFP effectively and maintain sustainable fundraising efforts to support the organization.NFP ratings agencies use the percentage of expenses devoted to programming as a key component in the formulas they use to monitor, rate, and compare NFPs.

3. PCC approves private company GAAP exception for certain acquired intangible assets   WebExclusive

BY Ken Tysiac
The Private Company Council (PCC) voted Tuesday to approve a GAAP alternative that will allow private companies to elect not to separately recognize and measure certain intangible assets acquired in a business combination.Private companies that elect the alternative would not recognize:Noncompetition agreements.Customer-related intangible assets that are not capable of being sold or licensed independently from the other assets of a business.It is anticipated that customer-related intangible assets often would not meet one of the criteria for recognition.

4. Socially awkward   CPEDirect

BY Theresa F. Henry, CPA, Ph.D., David A. Rosenthal, Ph.D. and Rob R. Weitz, Ph.D.
In November 2013, SEC Chair Mary Jo White questioned whether investors could project a company’s future potential from “unique financial or operational metrics” that may not be an indicator of future profitability. These comments followed Twitter’s initial public offering (IPO), which raised $1.82 billion through the planned sale of 70 million shares at $26 per share.

5. FASB’s proposed 2015 GAAP taxonomy available for comment   WebExclusive

BY Ken Tysiac
FASB released its proposed 2015 GAAP Financial Reporting Taxonomy on Friday and asked for public review and comment.The taxonomy is a list of financial reporting labels that are machine-readable and coded in XBRL. Users of financial statements can use the tags to electronically search for and process data so they can be easily accessed and analyzed.Updates for accounting standards and other recommended improvements are included in the proposed taxonomy, which is expected to be finalized by the SEC in early 2015.

6. COSO transition getting a close look from auditors   WebExclusive

BY Ken Tysiac
The early stages of implementation are over for many companies using the updated internal control framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In 2013, the framework—which had been in use since 1992—was updated to reflect changes in the business environment. U.S. public companies have been working to implement the new framework to fulfill their internal control over financial reporting requirements under the Sarbanes-Oxley Act (SOX).COSO will consider the 1992 framework to be superseded following a transition period that ends Dec.

7. FASB defines management’s going-concern responsibilities   WebExclusive

BY Ken Tysiac
FASB issued a new financial reporting standard Wednesday defining management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.The standard provides new guidance, as current GAAP does not describe management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or provide disclosures in the footnotes.Accounting Standards Update No.

8. Clarified, revised SSARS approved for reviews, compilations, and engagements to prepare financial statements   WebExclusive

BY Ken Tysiac
The AICPA Accounting and Review Services Committee (ARSC) voted during its meeting this month to approve clarified and revised standards for reviews, compilations, and engagements to prepare financial statements.The clarified and revised standards for compilations and engagements to prepare financial statements create a bright line between accounting (preparation) services and reporting (compilation) services.

9. FASB proposes simpler accounting for fees paid to cloud service providers   WebExclusive

BY Ken Tysiac
FASB on Tuesday issued a proposal designed to simplify the accounting for fees that public and private companies pay as customers in cloud-computing arrangements with third-party service providers.Rules exist under current GAAP addressing the accounting for cloud service providers. But there is no explicit accounting guidance under GAAP about how a customer should account for fees paid to the cloud service provider.This lack of guidance can lead to unnecessary cost and complexity during the evaluation of how to account for those fees, as well as diversity in practice.The proposed Accounting Standards Update, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic

10. FASB share-based payments standard challenges private companies   WebExclusive

BY Ken Tysiac
Although a review found that FASB’s share-based payments standard achieves its purpose, private company stakeholders told a post-implementation review team that the standard is sometimes difficult for them to understand and costly to apply.After analyzing the results of the Financial Accounting Foundation review of Statement 123(R), Share-Based Payment, released Tuesday, FASB does not plan to perform its own comprehensive review of the standard.But the private company concerns are consistent with feedback FASB received through outreach for its Simplification Initiative and for pre-agenda research performed for the Private Company Council.
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