Changes to Accounting Principles

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Planning For FASB’s New Revenue Recognition Standard

April 2015 The Financial Accounting Standards Board (“FASB”) has announced a proposal to delay by one year the effective date of implementation of the new revenue recognition standard under Generally Accepted Accounting Principles (“GAAP”), making the new date of change for public companies those reporting periods beginning after December 15, 2017.  Private companies would have [...]

FASB Says There’s Nothing Extraordinary About Your Financials

January 2015 The Financial Accounting Standards Board (“FASB”) has issued its first accounting standards update of 2015.  Simply put, FASB wishes to inform preparers of financial statements that there is nothing special about the results they are reporting, i.e., the end of the concept of “Extraordinary Items” on Income Statements. Accounting Standards Update No. 2015-01, Income Statement—Extraordinary [...]

New Standard For Revenue Recognition Standards Is Coming

January 2014 The final touches are being put on the new single, principles-based standard that will update and converge revenue recognition under the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board.  The change will impact entities that use US generally accepted accounting principles (“GAAP”) or International Financial Reporting Standards (“IFRS”).  FASB describes the [...]

Proposed Changes To Litigation Accounting And Disclosures Are Dropped

July 2012 In July 2012, the Financial Accounting Standards Board (FASB) voted to drop a controversial project that would have required companies to disclose more about contingent losses, including most notably those arising from litigation. The now-withdrawn proposal would have required significant additional disclosure of litigation. The vast majority of those commenting on the proposal [...]

Accounting Standard Will Require Significantly More Leases To Be Put On The Balance Sheet

June 2012 On June 13, 2012, after more than a year of deliberation, the International Accounting Standards Board (IASB) and U.S. Financial Accounting Standards Board (FASB) agreed on an approach for accounting for leases that generally will be simpler to implement than some of their earlier and more controversial proposals. The Boards plan to release [...]

FASB Toughens Off-Balance-Sheet Accounting

June 2009 Existing accounting guidance permits companies to report transfers of portions of financial assets as sales. The off-balance-sheet entities that enabled banks to keep securitized assets and other activities off their financial statements will now need to be included on their sponsor’s consolidated financial statements. An important accounting change which will be finalized this [...]

GAAP Reorganization Will Cause Short-Term Frustration, But Should Improve Research Capabilities

May 2009 On July 1, 2009, the Financial Accounting Standards Board (FASB) is expected to issue their “Accounting Standards Codification” (ASC) as the sole authoritative accounting guidance for U.S. generally accepted accounting principles (GAAP). The ASC will not change GAAP, but nevertheless represents a major shift in its organization and presentation. It is intended to [...]

New Accounting Rule Requires Lawyer Input

June 2005 Lawyers issuing legal confirmation letters to their client's auditor will have one more item to consider.  No later than December 31, 2005, companies with future environmental cleanup obligations may (depending upon the practices previously adopted) face a major change.  Because the new rule requires complex judgments and estimates, lawyers and their clients should [...]

How Principles-Based Accounting Affects Lawyers

August 2003 In late July 2003, the Securities and Exchange Commission (SEC) released a staff study required by Section 108(d) of the Sarbanes-Oxley Act.  The study strongly recommends that accounting standards be developed using a principles-based approach.  In several prior articles, we encouraged this change.  Although the full impact will take years to occur, the [...]

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