This Financial Reporting Update highlights key developments and issues that are relevant to finance and accounting personnel.
Financial Accounting Standards Board
On January 30th, the Financial Accounting Foundation (FAF) announced that it will provide free, enhanced online access to the Accounting Standards Codification (ASC) and the Governmental Accounting Research System (GARS) in an effort to make financial accounting standards more widely accessible to stakeholders and the public. There is no firm date for this change in online accessibility, but it is expected to occur this spring.
The ASC is the complete and official version of Generally Accepted Accounting Principles (GAAP) published by the Financial Accounting Standards Board (FASB) and used by public and private companies, nonprofit organizations, and employee benefit plans in the U.S. The GARS is the complete and official version of GAAP published by the Governmental Accounting Standards Board (GASB) and used by states, cities and other governmental entities in the U.S.
While free versions of both the ASC and GARS have been available online for years, the new system will provide enhanced features including navigation, search, printing, copy/paste and the ability to give feedback.
Securities and Exchange Commission
On January 25th, the Securities and Exchange Commission (SEC) proposed a new rule to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act. The rule is intended to prevent the sale of asset-backed securities (ABS) that are tainted by material conflicts of interest. If adopted, the rule would specifically prohibit securitization participants from engaging in transactions that could incentivize a securitization participant to structure an ABS in a way that would put the securitization participant’s interests ahead of those of ABS investors.
This new rule would prohibit an underwriter, placement agent, initial purchaser, or sponsor of an ABS from engaging in any transaction that would involve or result in any material conflict of interest between the securitization participant and an investor in such ABS. Such transactions would be “conflicted transactions” under this rule. The prohibition on conflicted transactions would begin on the date on which a person has reached, or has taken steps to reach, an agreement that such person will become a securitization participant with respect to an ABS, and would end one year after the date of the first closing of the sale of the relevant ABS.
The proposal will remain open for comment for 60 days after publication on SEC.gov or 30 days after publication in the Federal Register, whichever period is longer.
American Institute of Certified Public Accountants
On January 4th, the American Institute of Certified Public Accountants (AICPA) released the updated Uniform CPA Examination Blueprints. The Blueprints are based on the knowledge and skills required of a newly licensed CPA to meet the demands of firms, employers and clients.
Under the CPA Evolution licensure model, all candidates will be required to take three Core sections: Financial Accounting and Reporting, Auditing and Attestation, and Taxation and Regulation. Each candidate will then choose a Discipline in which to demonstrate additional knowledge: Business Analysis and Reporting, Information Systems and Controls, and Tax Compliance and Planning. There is a heightened focus on data and technology concepts in all Core and Discipline Exam sections to align with the increasing importance of emerging technologies in the profession.
Access to the full transition policy and related webcast recordings and FAQs can be found on National Association of State Boards of Accountancy (NASBA)’s website. December 15, 2023 is expected to be the last day of testing for all current CPA Exam sections. The CPA Evolution-aligned CPA Exam will launch in January 2024.