Our Financial Reporting Update highlights key developments and issues that are relevant to finance and accounting personnel.
Securities and Exchange Commission
The Securities and Exchange Commission (SEC) proposed amendments to form 13F to update reporting threshold for institutional investors. The amendment aims to lower the administrative burden on smaller fund managers. The proposal is open for comments for 60 days.
The SEC announced the creation of the Event and Emerging Risks Examination Team (EERT) in the Office of Compliance Inspections and Examinations (OCIE). The team will work with firms on emerging threats and critical market events.
American Institute of Certified Public Accountants
The American Institute of Certified Public Accountants (AICPA) issued Statement of Accounting Standards (SAS) No. 142 Audit Evidence. SAS No. 142 aims to address the issues arising from the evolving nature of business and audit services. Specifically, the SAS addresses emerging technologies, the application of professional skepticism, expanding sources of audit evidence, and the accuracy of audit evidence. The standard is effective for financial audits ending on or after December 15, 2022.
The AICPA issued Statement on Auditing Standards (SAS) No. 143, Auditing Accounting Estimates and Related Disclosures. The SAS addresses the complex scenarios involved in accounting for estimates and their associated risks. The standard is effective for financial audits ending on or after December 15, 2023.
The AICPA and its business and technology affiliate, CPA.com, released a Paycheck Protection Program (PPP) loan forgiveness platform. The platform automates the loan forgiveness process for compliant small businesses.
Financial Accounting Standards Board
The Financial Accounting Standards Board (FASB) proposed a delay of Accounting Standards No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI). The delay aims to help insurers who have been adversely impacted COVID-19.
The FASB called for public comments on a proposed new chapter of the FASB’s Conceptual Framework for Financial Reporting to define elements of financial statements (e.g., assets, liabilities, revenues, etc.). The entire proposed chapter is here. Comments from stake holders are due by November 13, 2020.
Save the Date
The FASB rescheduled a virtual roundtable discussion of the implementation of its standard on leases. The roundtable will now take place on Friday, September 18, 2020.