The Financial Accounting Standards Board (FASB) has stated, “Quality standards need quality implementation. You can’t have one without the other.” On July 17, the FASB voted to issue proposals that would increase the amount of time that smaller public companies, private companies and not-for-profit organizations have to implement major standards. The new deadline for other than large publicly traded companies would be at least two years after large publicly traded companies adopt a major standard.
The change would stagger effective dates using two “buckets”:
• “Bucket One” would include all Securities and Exchange Commission (SEC) filers (as defined in existing GAAP) excluding smaller reporting companies (SRCs) as currently defined by the SEC.
• “Bucket Two” would consist of all other entities, including: All other Public Business Entities (PBEs), including SRCs, Private companies, all not-for-profit organizations, and all employee benefit plans.
Two Accounting Standards Updates (ASUs) that apply this effective date philosophy have been issued. One ASU has effective date changes to Hedging, Leases, and Credit Losses (CECL). The second ASU has a deferral of effective dates for the Insurance standard for long-duration contracts (life insurance) for all stakeholders. This course will explain and explore the standards that have been issued and their impact on the profession and its application of the standards in question.
Publication Date: January 2020
Designed For
Attendees should include all professionals who will be affected by the changes issued. This would be professionals in public practice, in business, in government, and in education.
Topics Covered
- Accounting Standards Update No. 2018”12
- Why?
- Background to Effective Rate Changes
- Deliberations
- Costs and Benefits
- Deliberations Conclusions
- ASU No. 2019”09, November 2019 Financial Services—Insurance (Topic 944), Effective Date
- ASU No. 2019”10, November 2019 Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates
- ASU No. 2019”11, November 2019 Codification Improvements to Topic 326,Financial
Instruments—Credit Losses
Learning Objectives
- Recognize and apply the background of selected changes
- Identify the impact on selected issued standards
- Describe the Illustration of Changes
- Differentiate ASUs and how they apply
- Recognize correct statements regarding the costs and benefits with respect to the ASU impacting long-duration contracts issued by insurance entities
- Identify the Board's outreach with respect to long-duration contracts issued by insurance entities
- Describe the factors which affect the severity of challenges encountered by entities when transitioning to a major update
- Recognize effective dates for the new philosophy and when companies need to adapt
- Identify the priorities of the Financial Accounting Standards Board
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
Basic understanding of GAAP and Accounting Standard Updates.
Advance Preparation
None
Instructor
Pat Patterson
Cecil Patterson, (Pat), CPA, MBA, is an award-winning, nationally recognized author, speaker, and discussion leader for continuing education courses and numerous state societies. He has experience at the local and national CPA-firm level and as an adjunct university professor.
Pat holds an MBA from the University of North Florida and is a CPA and owner of the firm of Cecil Patterson, CPA. His firm provides, accounting, tax preparation and tax planning services, wealth management services, and consulting for businesses and other professional firms.
Pat has served on the AICPA Council, the FICPA Council, and the FICPA Educational Foundation Board of Trustees.