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Auditing & Accounting Updates

Auditing & Accounting Update

In this section, we provide brief updates on regulatory developments in auditing and accounting that may impact Japanese companies in the United States. Further discussion of the issues can be found in KPMG's Department of Professional Practice's Defining Issues.


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FASB Simplifies Accounting for Share-based Payments

Defining Issues 16-11 reports that the FASB recently issued an ASU intended to improve the accounting for share-based payment transactions as part of its simplification initiative.

Go to Defining Issues 16-11 (PDF) >

EU Audit Reforms: The Countdown Begins

Defining Issues 16-12 examines where European Union countries are in adopting EU audit reforms that come into full effect in two months, and discusses transition requirements. These reforms will affect many U.S. companies, especially those with an EU parent or subsidiary that is listed, or has banking or insurance activities.

Go to Defining Issues 16-12 (PDF) >

FASB Amends Performance Obligations and Licensing Guidance in Revenue Standard

Defining Issues 16-13 reports that the FASB recently issued an ASU that amends the revenue guidance on identifying performance obligations and accounting for licenses of intellectual property. The ASU changed the FASB’s previous proposals on renewals of right-of-use licenses and contractual restrictions.

Go to Defining Issues 16-13 (PDF) >

FASB Revenue TRG Discusses Implementation Issues

Defining Issues 16-14 reports that the FASB's Transition Resource Group (TRG) for Revenue Recognition met on April 18, 2016, to discuss implementation issues related to the FASB's revenue topic.

Go to Defining Issues 16-14 (PDF) >

SEC Issues Concept Release on Modernizing Regulation S-K

Defining Issues 16-15 reports that the SEC recently published a concept release seeking comments about how to modernize public companies’ business and financial disclosures made in periodic reports and registration statements that are required by Regulation S-K. The SEC’s review focused on recommendations made in a report mandated by the Jumpstart Our Business Startups Act.

Go to Defining Issues 16-15 (PDF) >

Revenue Standard Portends Potential Tax Changes

Defining Issues 16-16 reports that the FASB’s revenue standard supersedes substantially all existing U.S. GAAP on revenue recognition. Thus, companies may need to change the timing or amount of revenue recognized in their financial statements. These financial reporting changes may affect the calculation and financial reporting for income taxes and other types of taxes.

Go to Defining Issues 16-16 (PDF) >

FASB Proposes to Simplify Goodwill Impairment Accounting

Defining Issues 16-18 reports that the FASB is proposing to simplify the subsequent measurement of goodwill by removing Step 2 of the goodwill impairment test.

Go to Defining Issues 16-18 (PDF) >

FASB Proposal Would Clarify Scope and Application of Revenue Topic

Defining Issues 16-19 reports that the FASB proposed technical corrections and improvements to its revenue topic, and also proposed amendments to other Codification topics to address unintended consequences from applying the revenue topic. Many of the proposed changes address questions raised by the FASB / IASB Joint Transition Resource Group for Revenue Recognition.

Go to Defining Issues 16-19 (PDF) >

SEC Staff Warns about Non-GAAP Financial Measures

Defining Issues 16-20 reports that the SEC staff recently updated its guidance about how companies are allowed to use non-GAAP financial measures, and specifically listed prohibited practices. The new guidance follows recent comments by the SEC chair and SEC staff warning that enforcement action will be taken against companies that don’t comply with guidance outlining how a company must present non-GAAP financial measures.

Go to Defining Issues 16-20 (PDF) >

FASB Proposes to Clarify Scope of Derecognition of Nonfinancial Assets

Defining Issues 16-21 reports that a FASB proposal would clarify the scope of its guidance about derecognizing nonfinancial assets and would address the accounting for partial sales of nonfinancial assets.

Go to Defining Issues 16-21 (PDF) >

EITF Reaches Final Consensus on Statement of Cash Flows Issues

Defining Issues 16-22 reports that the FASB's Emerging Issues Task Force (EITF) reached a final consensus on statement of cash flows issues and a consensus-for-exposure on employee benefit plan master trust reporting issues at its June 10, 2016 meeting.

Go to Defining Issues 16-22 (PDF) >

FASB Accelerates Recognition of Credit Losses

Defining Issues 16-23 reports that the FASB’s new credit impairment standard will significantly change the way entities recognize impairment of financial assets by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets. Entities may need to collect more data and make significant changes to their systems, processes, and internal controls to comply with the requirements of the standard.

Go to Defining Issues 16-23 (PDF) >

FASB Proposes Targeted Change to VIE Primary Beneficiary Test

Defining Issues 16-25 reports that, in evaluating whether it is the primary beneficiary, the FASB proposed that a single decision maker or service provider would consider indirect interests held through related parties under common control on a proportionate basis.

Go to Defining Issues 16-25 (PDF) >

SEC Proposes Raising Limit to Qualify as a Smaller Reporting Company

Defining Issues 16-26 reports that the SEC proposed rules that would make it easier for smaller companies to qualify for reduced reporting requirements that currently are only available to companies with a public float below $75 million.

Go to Defining Issues 16-26 (PDF) >

SEC Proposes to Eliminate Redundant Disclosures

Defining Issues 16-27 reports that the SEC recently proposed rules that would eliminate redundant and outdated disclosure requirements as part of its disclosure effectiveness initiative.

Go to Defining Issues 16-27 (PDF) >

FASB Proposes Revamped Income Tax Disclosures

Defining Issues 16-28 reports that, as part of its broader disclosure framework project, the FASB recently proposed improvements to disclosures about income taxes to test the effectiveness of its proposed framework.

Go to Defining Issues 16-28 (PDF) >

For more information, please contact:

Michael Maekawa | +1 213-955-8331 |

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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