Accounting and Financial Reporting Feed

financial reporting

The AICPA works closely with the Financial Accounting Standards Board and other accounting regulators for the mutual goal of improving financial reporting. The AICPA provides accounting guidance via audit and accounting guides and issues papers, recommends to Financial Accounting Standards Board topics worthy of standard setting, and advocates its beliefs on needed outcomes on proposed accounting standards.

 

 

 

 

 

 

 


 

7 tips to have an influence on future standards

StandardsStandards are amended, and new ones are issued. But did you know that it is possible to express your opinion—and even make a difference—in the standard-setting process? If you’ve never done so before, here are some tips based on my own experience.

Your opinions are welcome! Standard setters actively solicit comments – not only from those who are directly impacted by the exposure draft but also from any other interested parties. They do read and carefully consider all comments submitted.

The explanatory memorandum is a helpful guide. With any exposure draft, you’ll want to understand the key issues and what they mean. Exposure drafts generally come with explanatory memoranda that offer a quick introduction to the proposed standard. It can tell you, among other things, the key issues addressed and changes proposed. Many explanatory memoranda include questions to consider when drafting your response.

 

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Credit losses: May the force be with your mission to CECL

Second in a series on the Financial Accounting Standards Board’s (FASB’s) Current Expected Credit Loss standard

YodaAfter years of debate over the role fair value accounting may have played during the subprime mortgage crisis, accountants seek to apply FASB’s current expected credit loss (CECL) standard as a “force for good” in their depository institutions.

If this is your mission for a bank, thrift or credit union, you probably feel like Luke Skywalker. Ultimately you want to be Yoda — thoughtfully presenting the keys to unlocking a force for good that can strengthen your institution against the dark side of internal disarray and competitive challenges.

As with any mission, success starts with understanding your situation and the power of resources at your fingertips. If you’re still struggling to read and digest the standard, “Do. Or do not. There is no try.”

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Your five-step guide for using data analytics in an audit

Data analyticsYour clients have a lot of information. And you, being the forward-thinking CPA that you are, want to use new technologies and techniques to get the most out of that data. So where do you begin?

Audit data analytics (ADAs) is a great place to start. Using tools you already have – Excel, for example – you can analyze entire populations, find anomalies and identify patterns. To help you on your way, we’ve outlined five basic steps for planning, performing and evaluating the results of an ADA used to perform an audit procedure.

  1. Plan the ADA.

The first step is to develop a solid plan. Figure out what information you’ll be reviewing and what you want to get out of it. Are you performing a risk assessment procedure, substantive analytical procedure, or test of details? Or are you seeking to form an overall conclusion from the audit? Once you know your objective, then think about the population of data you have available. Give preliminary consideration to how available, relevant and reliable it is (you’ll consider this in more detail in step 3). Finally, identify which specific ADA procedures, techniques and tools you’ll use.

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Credit losses: A new scope

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If you have put off reviewing the Financial Accounting Standards Board’s (FASB) new Credit Loss standard since its effective date is “in a galaxy far, far away,” you are not alone.

This is the largest accounting standard change affecting depository institutions (and other industries) within the last 40 years, so it can be intimidating for management to get started. Plus, the amount of flexibility and professional judgement allowed within the standard itself has caused confusion and fear, making it hard even to begin.

Do not give into your fear. “Fear is the path to the Dark Side.” Instead, read below to digest the new standard piecemeal, and to understand what it does and doesn’t say. Then you will have the tools needed to take the steps to implement it. 

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7 key steps to master revenue recognition implementation

Deadline loomingStandard setters have made game-changing revisions to revenue recognition standards, and the effective date for implementation is fast-approaching. The new standard replaces the existing transaction- and industry-specific revenue approach with a principles-based approach. Is your organization ready for this shift?

The new standard was originally issued by the Financial Accounting Standards Board as Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (the International Accounting Standards Board has also issued guidance with the same name), and several clarifying amendments have since been issued. The guidance affects all entities—public, private and not-for-profit—that have contracts with customers. The standard’s original effective date was postponed because of the complexity involved.

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