This Financial Reporting Update highlights key developments and issues that are relevant to finance and accounting personnel.

Financial Accounting Standards Board

The Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to clarify the scope of recent reference rate reform guidance related to the move away from the London Interbank Offered Rate (LIBOR). The guidance explains that certain optional expedients and exceptions, provided in Reference Rate Reform (Topic 848), can be applied to all derivative instruments affected by the move away from LIBOR regardless of whether they specifically reference LIBOR or another expected to be discontinued  reference rate.

FASB issued a proposed Accounting Standards Update (“ASU”) to provide an accounting alternative for certain private and not-for-profit entities that report goodwill (or any line item that would be affected by a goodwill impairment) on an annual basis. This alternative would allow these companies to evaluate the occurrence of goodwill impairment triggers only as of their annual reporting date rather than throughout the year.

Securities and Exchange Commission

The Securities and Exchange Commission (“SEC”) charged Deutsche Bank AG for violations of the Foreign Corrupt Practices Act (“FCPA”). These violations stem from the bank’s engagement with foreign officials, their relatives, and their associates as third-party intermediaries to generate and maintain more business.

The SEC approved new direct listing rules for the New York Stock Exchange (“NYSE”). The new rules allow companies to sell new shares to the public without an initial public offering.

American Institute of Certified Public Accountants

The American Institute of Certified Public Accountants (“AICPA”) published non-authoritative guidance to help CPA firms perform third-party assessments. The guidance clarifies what firms must do to conduct assessments that are in accordance with AICPA standards. The guidance also explains the third-party assessment program in greater detail and discusses which professional standards should be used when performing one of these third-party assessments.

Public Company Accounting Oversight Board

The Public Company Accounting Oversight Board (“PCAOB”) recently launched a new website. The website’s user-friendly interface and improved access to up-to-date information will contribute towards the PCAOB’s “key strategic priority” of developing transparency, accessibility, and stakeholder engagement.

The PCAOB published an article titled Staff Observations and Reminders during the COVID-19 PandemicThis article discusses how an auditor can perform audits despite the difficulties posed by COVID-19 and is a follow up to a report from April of 2020, COVID-19: Reminders for Audits Nearing Completion.

Other

EY updated its December 2020 Quarterly Tax Developments to discuss tax law changes from December 11-31 of 2020. Notably, this document covers the Consolidated Appropriations Act of 2021, which is a tax change that addresses some of the issues arising from COVID-19.