SPAC transactions present some novel reporting and disclosure issues that are being addressed in Corp Fins review process. Terms and Conditions | Privacy Policy. The amendments also require that a Commission-Identified Issuer that is a "foreign issuer," as defined in Exchange Act Rule 3b-4, provide certain additional disclosures in its annual report for itself and any of its consolidated foreign operating entities. Corp Fin discussed two recent accounting error examples in which the division did not agree to the Little r treatment by the particular company. exhibitor prospectus Going into 2022, companies will continue to make the most of favorable market conditions. Given that these SPAC transactions are novel, careful consideration should be given to disclosures around the transaction. Further, the release provides notice regarding the procedures the SEC has established to identify issuers and to impose trading prohibitions on the securities of certain Commission-Identified Issuers, as required by the HFCAA. Some key themes are already becoming clear from this consultation process, including that the board should be mindful how much change it imposes on stakeholders and that the IASB should reserve time for working with the new International Sustainability Standards Board as well as on emerging issues. PCAOB 2020 Inspection Results: Deficiency Rates Fall, High quality accounting standards and rules, High quality application against those standards and rules, High quality audits of financial statements, Wanting to see more in terms of financial statement disaggregation, Wanting to see more guidance on emerging topics, Wanting the FASB to re-evaluate areas of U.S. GAAP that are redundant, Wanting the FASB to improve its internal procedures (e.g., standard-setting procedures). For even more reference, here are additional recaps of the conference from Deloitte and EY (note that PwC and KPMG summaries were not available as of this blog publishing date). Any comments issued would be appropriately tailored to the specific company and industry, and would take into consideration the disclosure that a company has provided in Commission filings. Their concerns are ranging from an inability to track the performance of the acquired business to having to provide potentially company-sensitive and forward-looking information. This conference is being held Monday-Wednesday, December 6-8, 2021.

Preparers considering acquisitions and capital market transactions must obtain appropriately evaluated auditor independence in advance of those events to avoid costly delays. Subscribe to Riveron Insights and get relevant news and trends shaping the world of accounting, finance, technology, and operations. Although we are CPAs and have made every effort to ensure the factual accuracy of the post as of the date it was published, we are not responsible for your ultimate compliance with accounting or auditing standards and you agree not to hold us responsible for such. Preserving the convergence work of the Boards predecessors is an ongoing challenge, and it is now up to Dr. Barckow as IASB Chair and Rich Jones as FASB Chair to work together so that the gains of the earlier years convergence work are preserved for the benefit of investors around the globe. If extremely complex, Corp Fin urges consultation with it before the transaction is completed. Dr. Barckow indicated that keeping each other informed is obviously vitally important.

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Add a new comment: This blog shares our insights and conversations about accounting, auditing, and training matters.

No timetable on the issuance of a proposal was given. Thats our brand promise. Companies need to consider all the information, not just the facts that support its conclusion or its desired narrative of how things are going to be. We specialize in unifying and optimizing processes to deliver a real-time and accurate view of your financial position. Dr. Barckow indicated that although US companies are required to use US GAAP, many have international subsidiaries that report using IFRS Accounting Standards. Our clients include some of the largest accounting firms and companies in the world. -Post-implementation reviews. Grewal is open to reviewing the SECs current admission policy in which wrongdoers do not admit or deny their guilt. Stakeholders think the IASBs strategic direction and balance of activities are about right. Our solutions for regulated financial departments and institutions help customers meet their obligations to external regulators. In the current higher volume capital markets environment, the SEC staff has focused on the application of guidance, highlighting several areas in addition to materiality, such as changes to management discussion and analysis (MD&A), segment reporting, non-GAAP measures, and stock-based compensation. Health Savings Account (HSA) contribution limits and amounts that determine whether a health plan is an HSA-eligible high-deductible health plan are set to increase in 2023. The following are some highlights from conference speeches or presentations. Both the SEC and Financial Accounting Standards Board (FASB) have primarily focused on ensuring recent changes to standards are properly implemented and adopted, rather than rolling out sweeping new changes. Posted on Dec 14, 2021 by Corp Fin indicated that the guidance in SAB 99, Materiality, remains guidance and requires quantitative and qualitative considerations when determining if something is material to a reasonable investor. However, Corp Fin determined that these qualitative factors were not enough to overcome the magnitude of the quantitative errors. In addition, we take no responsibility for updating old posts, but may do so from time to time. Corp Fin cautioned that it does not believe the answer is one size fits all for all fact patterns. From all of us at GAAP Dynamics, we wish you a happy holiday season! This is not an aspirational process when companies are reporting actual numbers. Somebody had asked about non-GAAP disclosures and wondered if all the non-GAAP rules and attention were too much considering all the other new disclosures (ESG, human capital, reference rate reform, etc.) These controls are essential to the sort of robust compliance necessary. One approach the IASB is considering is to investigate a package of disclosures that could substitute, at least in part, the perceived loss of information that proponents of the impairment-only approach fear when abandoning that model. Lets talk! tamara anderson staff illinois Narrow definition of brokerage services for Sec. While Corp Fin encourages companies to continuously improve their financial disclosure, it is also important that there is a sound basis for deciding whether a measure is a metric or a non-GAAP measure. Corp Fin does not agree with this analysis. This means it is accurate, relevant, engaging, visually appealing, and fun. Paul Munter, the acting chief accountant of the SEC, remarked on matters related to the continued increase in capital market and mergers and acquisitions (M&A) activity. As the crypto market gains interest among investors, the FASB could consider this topic more closely in the future. The International Sustainability Standards Board (ISSB) was created this year to formulate a new baseline for sustainability reporting that meets investor needs. The most recent financial statements really are the ones that are most useful to investors. IASB due process procedures requires it to conduct a post-implementation review of any new standard or major amendment two to three years after the pronouncement has become effective. We streamline legal and regulatory research, analysis, and workflows to drive value to organizations, ensuring more transparent, just and safe societies. Dr. Barckows remarks focused on sustainability, the IASBs current and future work program, and convergence. Enabling organizations to ensure adherence with ever-changing regulatory obligations, manage risk, increase efficiency, and produce better business outcomes. Based on the various sessions throughout the conference, I gave the 2021 conference a theme of Investors new needs. We are living in an environment where there is constant and accelerated change and people are adapting to (and wanting to see) new information. According to IASB and AICPA representatives and other key accounting leaders, the push for increased ESG reporting has occurred in response to investor demands, and the trend is expected to increase. As a conference underwriter, Riveron and its team reflected with participants and other underwriters on recent challenges and emerging opportunities for businesses and accounting professionals. Companies should ensure they have an audit committee that understands the SEC reporting and internal controls requirements of being a public company. Jenny Lukac, CPA Big r restatements are larger and must be reported on Form 8-K as a material event.

Auditors, regulators, and industry practitioners examined the top factors shaping the accounting and finance world at this years AICPA & CIMA Conference on Current SEC and PCAOB Developments. All rights reserved. The IASB published a discussion paper on this topic in March 2020. He believes there is a playbook to restore the publics trust that includes robust enforcement, remedies, and compliance. The SEC offered some key considerations related to the unique risks and challenges a private company could encounter when entering the public markets through such a merger. As a result, Corp Fin did not necessarily disagree that these qualitative factors weren't relevant. engage aicpa cima springboard reckoning upheaval brings navigation insidepublicaccounting %PDF-1.7 % The SEC will identify Commission-Identified Issuers for fiscal years beginning after December 18, 2020. %%EOF Corp Fin reminded preparers that the additional number of adjustments and lack of consistency across companies non-GAAP measures may add unnecessary complexity for investors. read more. An uptick in M&A activity also drives more auditor independence evaluations.

20 0 obj <> endobj 199A QBI deduction does not apply to Sec. Dr. Barckow indicated that having concluded that the IASB couldnt respond to investors concerns about post-acquisition performance by improving the effectiveness of testing goodwill for impairment, the organization shifted gears and asked whether companies can provide investors with more useful information about the acquisitions they make to help them assess whether they have been a success. Corp Fin urged conference participants to review its previously issued Sample Letter to Companies Regarding Climate Change Disclosures. Accounting Insights from the 2021 AICPA Conference, Financial Accounting and Internal Reporting, Special Purpose Acquisition Companies (SPACs), Financial Close & Corporate Performance Management (CPM), Aerospace, Defense, & Government Contractors, Human Capital: New Disclosures May Propel Values-Based Investing, Fitting Internal Controls and SOX Within the IPO Roadmap, Capital Markets Activity and the Current Economic Outlook: Q3 2021 Update, AICPA Conference Recap: 2021 Highlights and Key Themes, Eliminating the need to fair value contract assets and liabilities accounted for under ASC 606 in purchase accounting (ASU 2021-08), Permitting non-public entities to apply incremental borrowing rate practical expedients at an asset class level under ASC 842 (ASU 2021-09), Revisiting certain gross write-off disclosures required under CECL, including the requirement to disclosure write-offs by vintage (not yet issued), Revising the accounting for goodwill model, potentially moving to an amortization plus impairment model, Revising the level at which goodwill impairment analysis is performed, moving to either the reportable or operating segment level from the reporting unit level, Updating the expiration date of the reference rate reform guidance to align with LIBORs expected extended life, Revisiting segment reporting and expanded disclosures related to expense line items. This letter provides views of the Corp Fin staff, indicating that the letter contains sample comments that the Division may issue to companies regarding their climate-related disclosure or the absence of such disclosure. Serving legal professionals in law firms, General Counsel offices and corporate legal departments with data-driven decision-making tools.

This determination requires careful consideration of SEC regulations and related staff or SEC reporting guidance. SEC rules require companies to disclose trends in their businesses and they can't mischaracterize the reasons for the growth that they experienced. During a panel on ESG reporting, Fortune 500 finance executives emphasized the importance of having a cross-functional team and a process for collecting, validating, and consistently presenting data as part of a companys ESG reporting program. It is important to stay attuned to what impact the pandemic has had and continues to have on financial reporting. Work on climate-related risks (including pollutant pricing mechanisms); Cryptocurrencies and related transactions; Disclosures have to be accurate and cannot be misleading. AH320o[ V c`5`|q"G2p13aQ>r.5F-v5 T6we1|g`a zqQ}xC?asF13! If a registrant is identified as a Commission-Identified Issuer based on its annual report for the fiscal year ended December 31, 2021, the registrant will be required to comply with the submission or disclosure requirements in its annual report filing covering the fiscal year ended December 31, 2022. 91 0 obj <>/Filter/FlateDecode/ID[<81E5D458F4E0432896509C8B954CBC93><1D3B5C94DACEA7458E6D84C1A3D1F9A9>]/Index[20 211]/Info 19 0 R/Length 246/Prev 254540/Root 21 0 R/Size 231/Type/XRef/W[1 3 1]>>stream With workflows optimized by technology and guided by deep domain expertise, we help organizations grow, manage, and protect their businesses and their clients businesses. The priorities of the division stress the importance of the accounting and audits profession in the work of the division. Gurbir Grewal and Matthew Jacques discussed the activities and focus of the SECs Division of Enforcement. Some of the qualitative factors considered by the company included that the: Corp Fin appreciated the qualitative factors and they are things that it sees generally with SAB 99 analysis. Given the robustness and diversity in views, finding a solution is truly challenging. The objective of these reviews is to assess whether the standard is working as the IASB had intended and not to reopen rounds of known arguments. Companies also must disclose, in addition to the information expressly required by SEC regulation, such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.. In addition, it is essential to carefully evaluate the status of various functions, including the people, processes, and technology that will meet the SEC filing requirements post-merger. When providing a non-GAAP financial measure, the company must provide the most directly comparable GAAP measure with equal or greater prominence. Further, the recent volume of restatements has a pronounced swing from big R restatements to little r revisions. In addition, a discussion of the reasons why the metric is useful to investors and how management uses the metric to manage the performance of its business should be provided. Subscribe to our blog, GAAPology, by entering your email below. Human capital disclosures may shape investor behavior for principles-based factors related to diversity, inclusion, and more. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. It may also include pre-existing subsidiaries into a new entity or a combination of these items. Id like to take this opportunity to thank all of our wonderful clients and supporters during this challenging year, but we are looking forward to what 2022 has to offer! Keep up-to-date on the latest insights and updates from the GAAP Dynamics team on all things accounting and auditing. The amendments are effective 30 days after publication in the Federal Register. Form 10-K now includes a new Item 9C, Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: This interpretive release was issued in 2010 and provides guidance to public companies regarding the SECs existing disclosure requirements as they apply to climate change matters. As CPAs, we believe great training is vital to doing your job well and maintaining the public trust. I had the pleasure of attending the 2021 AICPA Conference on Current SEC and PCAOB Developments from December 6th 8th. Dr. Andreas Barckow provided an update on the activities of the IASB. And I must say, the biggest highlight of the conference was that I was able to attend in person! Specialized in clinical effectiveness, learning, research and safety.

Here, focus areas will include financial reporting, internal control, and an increase in independent auditor procedures. The new addition to 232.405, Interactive Data File submissions, is effective from 30 days after publication in the Federal Register through July 1, 2023. Another personal highlight for me from the conference was during a Q&A session at the end of Day 1 with Mr. Munter. In general, if an accounting error is identified, an assessment of whether the error is a Little r or Big r restatement. Trusted clinical technology and evidence-based solutions that drive effective decision-making and outcomes across healthcare. At that time, the IASB had concluded that the existing impairment provisions could not be significantly improved rather than making changes at the fringes. Dr. Barckow discussed the following three current work program projects that the board has received comments on: -Primary Financial Statements. As transactions involving international entities rise, conference discussion highlighted the difference between international independence standards and Rule 2-01 of Regulation S-X, noting Rule 2-01 uses principles-based standards, and these present a high hurdle to reach a conclusion that an accountant could remain objective and impartial. Corp Fin discussed determining the materiality of accounting errors identified. | Tags: Accounting, In the news. Other issues Corp Fin is focused on related to SPACs and that parties should consider include: Corp Fin indicated that as part of its rulemaking process, it is considering guidance on these and other issues related to SPAC transactions.

A growing desire to understand financial results and its environmental and social impacts will mandate companies and their finance functions to invest in developing ESG governance and related controls. read more, Reports have been released for firms annually inspected by the PCAOB. CCH Axcess Audit will provide firms with an end-to-end integrated audit platform in the cloud. Meet the newest members to join the team and learn more about their eLearning and marketing superpowers! A lengthy discussion of the non-GAAP measure may overshadow or bury the GAAP measure. Even though Gary Gensler did not make an appearance at this years conference, Paul Munter, SEC Acting Chief Accountant, did a fantastic job summarizing important messages from the SEC on Day 1. hb``pe``````$ Key takeaways from the 2021 AICPA & CIMA Conference on Current SEC and PCAOB Developments. On more recent rulemaking, SEC Chief Accountant of the Division of Corporate Finance Lindsay McCord examined the continued adoption and compliance of the new rules related to MD&A, and this year will mark the first for many issuers to apply those rules in year-end reporting. Meet the Newest Members of GAAP Dynamics! Corp Fin has been commenting more on issues related to the presentation of metrics as non-GAAP measures or a non-GAAP measure as a metric. Corp Fin has an overall focus on disclosures during the IPO stage. Governance structure should include an IT infrastructure with proper general controls (ITGCs), a sufficient internal control framework, and reporting procedures akin to those in place around the financial reporting environment. Independence is the responsibility of auditors, management, and boards. The Final Rule, Release No. Management is encouraged to bring a heightened scrutiny to their annual assessments of the effectiveness of internal controls over financial reporting (ICFR).