Annual Accounting and Auditing Update. 11 December 2015
|
|
- Rosamund Caldwell
- 5 years ago
- Views:
Transcription
1 Annual Accounting and Auditing Update 11 December 2015
2 Disclaimer The views expressed by panelists are not necessarily those of Ernst & Young LLP. These slides are for educational purposes only and are not intended, and should not be relied upon, as accounting advice. Page 2 11 November 2015 Implementing the new revenue recognition standard
3 Agenda ASC 606 New Revenue Recognition Standard FASB Developments - Leases Restatement Themes Page 3 11 November 2015 Implementing the new revenue recognition standard
4 Introduction to today s speakers Drew Nagus EY - Financial Accounting Advisory Services Matt Schuler Raytheon Page 4 11 November 2015 Implementing the new revenue recognition standard
5 Where are we now? The new standard was issued on 28 May 2014, and a number of questions have arisen in transition. The Financial Accounting Standards Board (FASB)/International Accounting Standards Board (IASB) Joint Transition Resource Group for Revenue Recognition (TRG) and American Institute of Certified Public Accountants (AICPA) industry task forces are actively discussing issues submitted to them. Some of the issues discussed by the TRG have resulted in FASB and IASB activity: May 2015 FASB issued an Exposure Draft (ED) on licenses and performance obligations August 2015 FASB issued an ED covering principal versus agent assessments September 2015 FASB issued an ED covering certain transition issues, noncash consideration, sales taxes, and collectibility The IASB issued a single ED covering its proposed amendments The complexity of implementing the new standard should not be underestimated. Many companies are appropriately accelerating implementation efforts. Page 5 11 November 2015 Implementing the new revenue recognition standard
6 Effective date deferral The FASB issued Accounting Standards Update (ASU) on 13 August 2015, which finalized the one-year deferral for the new revenue standard: It will be effective in 2018 for calendar-year public companies. Early adoption will be allowed using original effective dates (annual periods beginning after 15 December 2016). The IASB has approved a one-year deferral for IFRS 15: Companies will be required to adopt it in Early adoption will continue to be allowed. Page 6 11 November 2015 Implementing the new revenue recognition standard
7 After adoption Which will you choose? After adoption Before adoption Journey to implement the new standard You have a choice in transition methods 2015 and prior (year of adoption) 2019 and beyond Reporting 10-K, 10-Q Legacy GAAP Legacy GAAP Legacy GAAP Footnotes Full retrospective Reporting 10-K, 10-Q SAB 74 disclosures (including transition method and impact) Joint Transition Resource Group and industry groups Presented in 2018 financial statements New GAAP New GAAP New GAAP New GAAP Footnotes ASC 250 Expanded Expanded Cumulative catch-up adjustment at January 1, 2016 Modified retrospective Presented in 2018 financial statements Reporting 10-K, 10-Q Legacy GAAP Legacy GAAP New GAAP New GAAP Footnotes Legacy GAAP Expanded Expanded Cumulative catch-up adjustment at January 1, 2018 Page 7 11 November 2015 Implementing the new revenue recognition standard
8 Revenue recognition Summary of the model Core principle: Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations Step 5: Recognize revenue when (or as) each performance obligation is satisfied Page 8 11 November 2015 Implementing the new revenue recognition standard
9 What makes this complex? Contracts Performance obligations Transaction price Allocation Recognition timing Strict criteria to be a contract Identifying promised goods and services May not equal contractual price Estimating standalone selling prices Transfer of control: point in time or over time Identifying the customer Contract modifications Identify explicit and implicit contract terms Established business practices Determining performance obligations (i.e., distinct goods and services) Options granting a material right Service-type and assurance-type warranties Variable consideration, incl. bonuses, returns, concessions, discounts Constraint on variable consideration Significant financing component Noncash consideration Exceptions for allocating variable consideration and discounts Measuring progress over time Consignment arrangements Customer acceptance Repurchase provisions Assessing collectibility Principal versus agent Payments to customers Licenses Combining contracts Subsequent changes in transaction price Page 9 11 November 2015 Implementing the new revenue recognition standard
10 Revenue recognition Step 1: Identify the contract(s) with a customer Contract defined as an agreement between two or more parties that creates enforceable rights and obligations Can be written, oral or implied Does not exist if both parties have not performed and can cancel without penalty Arrangement must meet these criteria to be within scope of standard: Parties have approved the contract and are committed to perform Each party s rights and payment terms can be identified Contract has commercial substance Collection is probable Contracts entered into at the same time with the same customer should be combined if certain criteria are met Page November 2015 Implementing the new revenue recognition standard
11 Revenue recognition Step 2: Identify the performance obligations A performance obligation is a promise (explicit or implicit) to transfer to a customer either: A distinct good or service A series of distinct goods or services that are substantially the same and have the same pattern of transfer Performance obligations are identified at contract inception and determined based on contractual terms, customary business practice Proposed new guidance will allow entity to disregard promises that are deemed to be immaterial to a contract Proposed new guidance on shipping and handling Page November 2015 Implementing the new revenue recognition standard
12 Revenue recognition Step 2: Identify the performance obligations (cont.) A good or service is distinct if the following criteria are met: It is capable of being distinct It is distinct within the context of the contract Principal vs. agent considerations Incidental obligations or marketing incentives may be performance obligations (e.g., free maintenance provided by auto manufacturers) Does not include activities to satisfy an obligation (e.g., setup activities) unless a good or service is transferred Page November 2015 Implementing the new revenue recognition standard
13 Revenue recognition Step 3: Determine the transaction price Transaction price is defined as the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer Transaction price includes the effects of the following: Variable consideration (including application of the constraint) Significant financing component Consideration paid or payable to a customer TRG discussions regarding interaction of variable consideration and later of guidance Noncash consideration Page November 2015 Implementing the new revenue recognition standard
14 Revenue recognition Step 3: Determine the transaction price (cont.) Variable consideration is estimated using an expected value or a most likely amount approach An entity is required to evaluate whether to constrain amounts of variable consideration included in the transaction price Amounts are included in the transaction price only if it is probable a significant revenue reversal will not occur when uncertainties are resolved Page November 2015 Implementing the new revenue recognition standard
15 Revenue recognition Step 4: Allocate the transaction price Transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis Model provides two possible exceptions relating to the allocation of variable consideration and discounts, if certain criteria are met When a standalone selling price is not observable, an entity is required to estimate it Maximize the use of observable inputs Apply estimation methods consistently in similar circumstances Standard describes three estimation methods, but others are permitted (and a combination of estimation methods is allowed) Standalone selling prices used to perform the initial allocation should not be updated after contract inception Page November 2015 Implementing the new revenue recognition standard
16 Revenue recognition Step 5: Recognize revenue Revenue recognized upon satisfaction of a performance obligation by transferring control of a good or service to a customer Control transfers over time if one of three criteria is met, otherwise control transfers at a point in time Customer simultaneously receives and consumes the benefits as the entity performs Entity s performance creates or enhances an asset that the customer controls as the asset is created or enhanced Entity s performance doesn t create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance to date The following indicators should be considered when determining the point in time that control transfers: The entity has a present right to payment for the asset The customer has legal title to the asset The customer has physical possession of the asset The customer has the risk and rewards of ownership of the asset The entity has evidence of the customer s acceptance of the asset Page November 2015 Implementing the new revenue recognition standard
17 Other aspects of the model Incremental costs of obtaining a contract Incremental costs of obtaining a contract would be capitalized if they are expected to be recovered Incremental costs are costs that would not have been incurred if the contract had not been obtained Practical expedient to allow immediate expense recognition, if the asset s amortization period is one year or less Assets are amortized over the period in which the related goods or services are transferred and subject to impairment If costs are determined to relate to more than one contract (e.g., expected contract renewals), amortization should consider both current and anticipated contracts What s changing? Current US GAAP allows an option to either immediately expense or capitalize costs of obtaining a contract Page November 2015 Implementing the new revenue recognition standard
18 Other aspects of the model Costs to fulfill a contract Other applicable literature is considered first Costs of fulfilling a contract that cannot be capitalized under another standard would be capitalized if they meet all of the following criteria: Relate directly to a contract Generate or enhance resources that will be used to satisfy performance obligations in the future Are expected to be recovered Costs of fulfilling a contract that are capitalized would be amortized consistent with the pattern of transfer of the related good or service and would be subject to impairment Abnormal costs not considered in the price of the contract would be expensed as incurred Page November 2015 Implementing the new revenue recognition standard
19 Revenue recognition Disclosure (cont.) Excerpt from Accounting Standards Codification Example 41 Disaggregation of Revenue Quantitative Disclosure Segments Primary Geographical Markets Consumer Products Transportation Energy Total North America $ 990 $ 2,250 $ 5,250 $ 8,490 Europe ,000 2,050 Asia $ 1,990 $ 3,260 $ 6,250 $ 11,500 Major Goods/ Service Lines Office Supplies $ Appliances Clothing Motorcycles Automobiles 2,760 2,760 Solar panels 1,000 1,000 Power plant 5,250 5,250 $ 1,990 $ 3,260 $ 6,250 $ 11,500 Timing of Revenue Recognition Goods transferred at a point in time $ 1,990 $ 3,260 $ 1,000 $ 6,250 Services transferred over time 5,250 5,250 $ 1,990 $ 3,260 $ 6,250 $ 11,500 Page November 2015 Implementing the new revenue recognition standard
20 Revenue recognition Disclosure (cont.) Excerpt from Accounting Standards Codification Example 42 Disclosure of the Transaction Price Allocated to the Remaining Performance Obligations 20X8 20X9 Total Revenue expected to be recognized on this contract as of December 31, 20X7 $1,575 (a) $788 (b) $2,363 (a) Transaction price = $3,150 ($100 x 24 months + $750 variable consideration) recognized evenly over 24 months at $1,575 per year (b) $1,575 2 = $788 (that is, for 6 months of the year) On June 30, 20X7, an entity enters into two-year noncancellable contract. The customer pays fixed consideration of $100 per month and a onetime variable consideration payment ranging from $0 - $1,000 (that is, a performance bonus). The entity estimates that it will be entitled to $750 of the variable consideration. Page November 2015 Implementing the new revenue recognition standard
21 What are we learning? Key observations and lessons learned from diagnostics Understanding the standard s complexity is necessary for adequate planning Leveraging a top down strategic scoping approach may reduce the number of detailed contract reviews required The process of identifying revenue streams should include consideration of multiple different categories to disaggregate a company s business Surveying can be challenging and time consuming, but may save time in the long run Working closely with local management, operations and legal when reviewing contracts is essential for a comprehensive understanding of the revenue streams Templates for gap analysis and contract reviews should include information beyond the technical accounting details Extrapolating the impacts of changes in revenue recognition patterns of one or more individual contracts across a larger revenue stream population can be time consuming and may require significant estimates and data inputs Page November 2015 Implementing the new revenue recognition standard
22 Other Tax Business processes, control environment and data capture Accounting and reporting Transition and disclosures Accounting policy PMO governance and change management Program overview Business processes and system enablement critical path and beyond Diagnostic Solution development Implementation Sustain Governance objective and plan Program governance structure, ongoing management, budget and resource management, dependency analysis, risk management Revenue stream identification and scoping Communication structure, approach, routine work sessions with stakeholders Awareness, education and change management Individual contract selection and review Preliminary accounting policy decision Expanded contract review to support changes and lack thereof Training and implement new policy Accounting and disclosure gap analysis Transition method evaluation Finalize new policy Transition method selection Analyze accounting differences and potential financial impacts Evaluate enhanced disclosure requirements and data to support Follow TRG, FASB and IASB activities, AICPA and peer group implementation developments Understand and assess current transaction processing by revenue stream Develop systems and business processes requirements Design systems and processes enhancements Design and implement I/C changes Implement systems and processes enhancements Test and remediate I/C changes Go live in future state environment Sustain I/C environment Full retrospective -- interim processing environment, including cumulative adjustment and look-back transaction processing Transition contract and data approach, consideration and capture until future state environment is live Modified retrospective -- interim processing environment, including cumulative adjustment Maintain legacy processing environment for modified retrospective disclosures Identify new or different temporary differences Document, train and execute new tax policies and procedures Identify tax method changes and finalize new policy File method changes and adjust transfer pricing Other considerations I/C prices, transfer pricing and indirect taxes Assess and implement changes to customer contracting process, legal terms or business practices, finance planning and analysis, and investor relations Timely discussion of key implementation considerations with external audit team Page November 2015 Implementing the new revenue recognition standard * Dates assume early adoption not elected
23 Critical path Sample full vs. modified retrospective timelines Full retrospective sample timeline J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D Go-live 2018* Dual reporting for 2016 and 2017 Accounting Diagnostic (3 months) System enablement evaluation (1 month) Design** (3 months) Implementation (6 months) Testing (6 months) Data conversion cumulative catch-up and reprocessing transaction activity from January 2016 to April 2017 (5 months) Parallel accounting and audit (6 months) Turn off old GAAP Start year-end close Record cumulative effect adjustment Modified retrospective sample timeline J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 2018* Dual reporting for footnote disclosure Go-live Accounting Diagnostic (3 months) System enablement evaluation Design** (3 months) Implementation (6 months) Testing (6 months) Data conversion and cumulative Start yearend (1 month) catch-up (5 months) close Record cumulative effect adjustment *Timelines assume a January 2018 effective date **Includes solution approach for revenue forecasting Phase timeline Typical system blackout dates Page November 2015 Implementing the new revenue recognition standard
24 FASB developments - Leases Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
25 Leases Overview Q Exposure draft (ED) The FASB and the IASB have substantially completed redeliberations on the new leases standards Key remaining item effective date Key changes to today s US GAAP guidance include: Redeliberations and second ED 2014 Q Redeliberations on second ED Lessees would recognize assets and liabilities for most leases New presentation and disclosure requirements for lessees Real estate-specific guidance would be eliminated Q Final standard Leases would be classified using a principle similar to IAS 17, Leases Only costs that would not have been incurred if a lease had not been executed would qualify as initial direct costs Final standards are not likely to be effective before 1 January 2018 Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
26 Leases Definition of a lease A contract is a lease if it both: Depends on the use of an identified asset (explicitly or implicitly) No identified asset if the supplier has a substantive substitution right Conveys the right to control the use of an identified asset that is, the customer has the right to (both): Direct the use of the identified asset Obtain substantially all of the potential economic benefits from directing the use Non-lease components of a contract would be accounted for separately under other applicable GAAP Subject to practical expedient for lessees Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
27 Leases Lease classification Lessees and lessors would classify leases using a classification principle similar to IAS 17, Leases Similar to US GAAP but without bright lines Today s real estate-specific guidance would be eliminated Today s additional lessor classification criteria would be changed Lessees would classify most leases as either: Type A similar to today s capital leases Type B similar to today s operating leases Optional exemption for short-term leases Lessors would classify all leases as either: Type A similar to today s sales-type or direct financing leases Type B similar to today s operating leases Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
28 Leases Lessee accounting. Initial recognition and measurement Subsequent measurement lease liability Type A lease Type B lease Initially measure the right-of-use (ROU) asset and lease liability at present value of lease payments. Initial measurement of the ROU asset also includes the lessee s initial direct costs and prepayments made to the lessor less lease incentives received from the lessor. Accrete the lease liability based on the interest method using discount rate determined at lease commencement * and reduce the lease liability by the payments made Measure the lease liability at the present value of remaining lease payments using discount rate determined at lease commencement Subsequent measurement ROU asset Income statement effect Amortize the ROU asset, generally on a straight-line basis over shorter of lease term or useful life of ROU asset Generally front-loaded expense Separate interest and amortization Measure ROU asset at amount of lease liability and adjust for cumulative prepaid or accrued rents (i.e., non-straight-line rent payments), any lease incentives received and lessee initial direct costs Generally straight-line expense Single line of lease or rent expense * As long as a reassessment and a change in the discount rate has not been triggered. Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
29 Leases Lessor accounting Many aspects of today s lessor accounting would remain the same Type A leases similar to today s sales-type or direct financing leases Selling profit (if any) would be deferred if lease does not transfer control of underlying asset to lessee (and collection of lease payments is probable) Lessors can recognize profit for Type A leases that meet all of the following: Selling profit is included (fair value is greater than carrying value) Control of the underlying asset is transferred to the lessee Collectibility of lease payments is probable If collectibilty is not probable: defer income recognition (similar to ASC 606) Type B leases similar to today s operating leases Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
30 Restatement themes Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
31 Learning objectives Determine whether the accounting topics that most commonly gave rise to restatements in recent years could require action on your part Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
32 Restatement themes Top three topics 2014 % Top three topics 2013 % Income taxes 17 Income taxes 15 Revenue recognition 13 Revenue recognition 10 Statement of cash flows 6 Statement of cash flows 10 Accounting for income taxes, revenue recognition and statement of cash flows continue to be leading causes of annual restatements Correct identified errors as soon as practicable to avoid restatement due to an accumulation of individually immaterial errors Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
33 Restatement themes General observations Restatements in 2014 not concentrated by issue General observations Identify and account for key contractual terms Focus on changes in business and effects on estimates on a timely basis Track tax basis of assets and liabilities beyond rollforward of basis differences Consider implications on internal controls Page November 2015 Implementing the new revenue recognition standard 2015 Year-end Corporate
34 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US Ernst & Young LLP. All Rights Reserved ED None. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com
The new accounting standard for leases. 27 March 2017
The new accounting standard for leases 27 March 2017 Disclaimer Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity.
More informationIs Your Operating Lease An Asset or Liability? It s Now Both
MFM Annual Conference Is Your Operating Lease An Asset or Liability? It s Now Both 23 May 2016-1:30 pm 2:20 pm Disclaimer These slides are for educational purposes only and are not intended, and should
More informationTechnical Line FASB final guidance
No. 2016-09 14 April 2016 Technical Line FASB final guidance How the FASB s new leases standard will affect health care entities In this issue: Overview... 1 Key considerations... 3 Scope and scope exceptions...
More informationTechnical Line FASB final guidance
No. 2018-08 20 September 2018 Technical Line FASB final guidance How the new leases standard affects engineering and construction entities In this issue: Overview... 1 Key considerations... 2 Scope and
More informationLeases: Overview of the new guidance
Leases: Overview of the new guidance Prepared by: Richard Stuart, Partner, National Professional Standards Group, RSM US LLP richard.stuart@rsmus.com, +1 203 905 5027 March 2, 2016 Introduction On February
More informationNew leases standard ASC 842 Lessee - operating leases. Itai Gotlieb, Partner, Professional Practice July 2017
ASC 842 Lessee - operating leases Itai Gotlieb, Partner, Professional Practice July 2017 Overview Under Accounting Standards Codification (ASC) 842, Leases, lessees recognize assets and liabilities for
More informationFSA Faculty Consortium Technical Accounting Update. Bob Uhl, partner, Deloitte & Touche LLP
FSA Faculty Consortium Technical Accounting Update Bob Uhl, partner, Deloitte & Touche LLP Deloitte University May 30, 2014 Acronyms Acronym ASC ASU ED FASB IASB IFRS U.S. GAAP Full Form Accounting Standards
More informationTechnical Line FASB final guidance
No. 2017-17 29 June 2017 Technical Line FASB final guidance How the new revenue standard affects operating real estate entities In this issue: Overview... 1 Real estate sales... 2 Property management services...
More informationEdison Electric Institute and American Gas Association New Lease Standard
Edison Electric Institute and American Gas Association New Lease Standard May 16, 2016 Disclaimer The information contained herein is of a general nature and is not intended to address the circumstances
More informationTechnical Line FASB final guidance
No. 2019-01 3 January 2019 Technical Line FASB final guidance How the new leases standard affects automotive entities In this issue: Overview... 1 Recent standard setting activity... 2 Key considerations...
More information2018 Accounting & Auditing Update P R E S E N T E D B Y : D A N I E L L E Z I M M E R M A N & A N D R E A S A R T I N
2018 Accounting & Auditing Update P R E S E N T E D B Y : D A N I E L L E Z I M M E R M A N & A N D R E A S A R T I N AGENDA Leases FASB & GASB Revenue Recognition FASB 2 FASB ASU 2016-02, Leases (Topic
More informationClick to edit Master title style REVENUE RECOGNITION Understanding the New Revenue Recognition Standard ASC 606
Click to edit Master title style REVENUE RECOGNITION Understanding the New Revenue Recognition Standard ASC 606 9/7/2017 0 Agenda Overview of ASC 606 Review of the five-step process Accounting for contract
More informationTechnical Line FASB final guidance
No. 2016-11 14 April 2016 Technical Line FASB final guidance How the FASB s new leases standard will affect real estate entities In this issue: Overview... 1 Key considerations... 2 Scope and scope exceptions...
More informationIFRS 16 Lease overview and EY s enabling toolkit
IFRS 16 Lease overview and EY s enabling toolkit Content Page Section I IFRS 16 overview 2 Appendix I EY Lease enabling technology suite 9 Appendix II EY Contacts 17 Page 1 IFRS 9 Classification and measurement
More informationDefining Issues May 2013, No
Defining Issues May 2013, No. 13-24 FASB and IASB Issue Revised Exposure Drafts on Lease Accounting The FASB and IASB (the Boards) recently issued revised joint exposure drafts (EDs) on proposed changes
More informationTechnical Line FASB final guidance
No. 2018-15 6 December 2018 Technical Line FASB final guidance How the new leases standard affects consumer products and retail entities In this issue: Overview... 1 Recent standard-setting activity...
More informationAccounting and Auditing Update. Staci L. Brogan, CPA, Shareholder Patricia R. Giudici, CPA, Senior Manager Schneider Downs & Co. Inc.
Accounting and Auditing Update Staci L. Brogan, CPA, Shareholder Patricia R. Giudici, CPA, Senior Manager Schneider Downs & Co. Inc. Agenda Overview of the standard setting agenda Revenue recognition Lease
More informationImplementing the New Lease Guidance
Implementing the New Lease Guidance October 22, 2018 2018 Crowe LLP 2018 Crowe LLP Agenda Background Scope Effective dates & transition requirements Lessee accounting model Lessor accounting model Specialized
More informationImpact of lease accounting changes to corporate real estate
Impact of lease accounting changes to corporate real estate Overview In February 2016, the Financial Accounting Standards Board (FASB) issued its long-awaited revision to lease accounting Accounting Standards
More informationThe New Lease Accounting Standard. Hunter Mink, CPA, CCIFP Brian Rosenberg, CPA, MBA
The New Lease Accounting Standard Hunter Mink, CPA, CCIFP Brian Rosenberg, CPA, MBA 1 Agenda Introduction Lease Identification and Classification Lessee Accounting Other Considerations Disclosures Impact
More informationLease Accounting Standard Update ASU Presented by: Nicholas Hoefel, CPA Manager, Audit Services Group
Lease Accounting Standard Update ASU 2016-02 Presented by: Nicholas Hoefel, CPA Manager, Audit Services Group 1 Overview Introduction Background and current environment Effective dates and transition Key
More informationIFRS Project Insights Leases
IFRS Project Insights Leases The IASB and FASB ( the Boards ) published a Discussion Paper (DP) setting out a proposed lessee accounting model in March 2009. The proposed accounting model has evolved since
More informationTechnical Line FASB final guidance
No. 2018-10 11 October 2018 Technical Line FASB final guidance How the new leases standard affects airlines In this issue: Overview... 1 Key considerations... 2 Scope and scope exceptions... 2 Definition
More informationLEASES WHERE ARE WE? Steve Rathjen
LEASES WHERE ARE WE? Steve Rathjen 267 256-3110 srathjen@kpmg.com Agenda Project status Lease definition and classification Lessee accounting Lessor accounting Presentation, disclosures, and transition
More informationDefining Issues. FASB Completes Technical Redeliberations on Leases. October 2015, No Key Facts. Key Impacts
Defining Issues October 2015, No. 15-47 FASB Completes Technical Redeliberations on Leases The FASB met on October 7 to discuss comments received and related follow-up issues on the external review of
More informationAccounting and Auditing. Norman Mosrie, CPA, FMFMA, CHFP James Sutherland, CPA
Accounting and Auditing Norman Mosrie, CPA, FMFMA, CHFP James Sutherland, CPA Leases (ASU 2016-02; Topic 842) A lease contract conveys the right to use an asset (the underlying asset) for a period of time
More informationAccounting and Auditing Update. Tennessee Chapter of hfma Spring Institute 2016 Presented by William C. Matheney FHFMA CPA and Meredith P.
Accounting and Auditing Update Tennessee Chapter of hfma Spring Institute 2016 Presented by William C. Matheney FHFMA CPA and Meredith P. Cate Today s Objectives Present an overview of pertinent recently
More informationSomething Borrowed, Something New Get Ready for the New Lease Accounting Standard
April 2016 Something Borrowed, Something New Get Ready for the New Lease Accounting Standard By Scott G. Lehman, CPA, and David E. Wentzel, CPA Audit / Tax / Advisory / Risk / Performance Smart decisions.
More informationPreparing for the new ASC 842 Leasing Standard Challenges and Solutions. August 24, 2017
Preparing for the new ASC 842 Leasing Standard Challenges and Solutions August 24, 2017 Learning objectives Define leasing implications related to recently revised FASB standard Differentiate between new
More informationPreparing for the new ASC 842 Leasing Standard Challenges and Solutions. August 24, 2017
Preparing for the new ASC 842 Leasing Standard Challenges and Solutions August 24, 2017 Learning objectives Define leasing implications related to recently revised FASB standard Differentiate between new
More informationLeases make their way onto the balance sheet
February 2016 IFRS Practical Matters France Leases make their way onto the balance sheet Navigating the journey for a smooth landing What you need to know The IASB issued a new standard for leases that
More informationIFRS 15. Revenue from Contracts with Customers. Presented by CPA Dr. Peter Njuguna
IFRS 15 Revenue from Contracts with Customers Presented by CPA Dr. Peter Njuguna Introduction Revenue is income from ordinary activities. A contract has rights and obligations between two or more parties.
More informationExecutive Summary. New leases standard Lessees
Executive Summary December 2018 The new leases standard focuses on increased transparency and comparability providing financial statement users with more information about an entity s leasing activities.
More informationThe joint leases project change is coming
No. 2010-4 18 June 2010 Technical Line Technical guidance on standards and practice issues The joint leases project change is coming What you need to know The proposed changes to the accounting for leases
More informationNew IASB leases standard engineering and construction
Applying IFRS New IASB leases standard engineering and construction October 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease 3 1.3 Arrangements
More informationTechnical Line FASB final guidance
No. 2018-18 13 December 2018 Technical Line FASB final guidance How the new leases standard affects life sciences entities In this issue: Overview... 1 Key considerations... 2 Scope and scope exceptions...
More informationLease accounting scope & impacts
Leasing Lease accounting scope & impacts Scope What s in? All industries, all entities Arrangements that meet the definition of a lease Embedded leases within other arrangements What s out? Leases of:
More informationPRACTICAL TIPS FOR IMPLEMENTING THE NEW LEASE ACCOUNTING STANDARD
PRACTICAL TIPS FOR IMPLEMENTING THE NEW LEASE ACCOUNTING STANDARD SHAUNA WATSON, VP, GLOBAL HEAD OF TECHNICAL ACCOUNTING MICHAEL ALLEN, PARTNER, TRANSACTION ADVISORY SERVICES 1. Overview of Accounting
More informationLeases: A Comprehensive Update on the Joint Project
The Dbriefs Financial Reporting series presents: Leases: A Comprehensive Update on the Joint Project Bob Uhl, Deloitte & Touche LLP Trevor Farber, Deloitte & Touche LLP James Barker, Deloitte & Touche
More informationIFRS 15 Revenue from contracts with customers Presentation by: CPA Freda Mitambo Partner, Deloitte & Touche
IFRS 15 Revenue from contracts with customers Presentation by: CPA Freda Mitambo Partner, Deloitte & Touche Uphold public interest Why IFRS 15 is important What does it mean for clients? Revenue recognition
More informationGAAP Update SCHFMA 2016 Fall Institute
GAAP Update SCHFMA 2016 Fall Institute Ken Conner, CPA Shareholder Tiffany Brackett, CPA Senior Manager This material was used by Elliott Davis Decosimo during an oral presentation; it is not a complete
More informationDefining Issues. FASB and IASB Take Divergent Paths on Key Aspects of Lease Accounting. March 2014, No Key Facts
Defining Issues March 2014, No. 14-17 FASB and IASB Take Divergent Paths on Key Aspects of Lease Accounting At their March 18-19 meeting to redeliberate the proposals in their 2013 exposure drafts (EDs)
More informationLease Accounting and Loan Covenants: What is the Impact?
Lease Accounting and Loan Covenants: What is the Impact? Monday June 26, 2017 9:15 AM 10:30 AM Presented by: Charlie Shannon Partner Moss Adams LLP 8750 N. Central Expressway, Suite 300 Dallas, TX 75231
More informationLease Accounting Standard
Lease Accounting Standard AGA/EEI Spring Accounting Conference May 22, 2017 Lease Identification & Lease Classification Lease identification Identified asset Control over use Lease Asset is explicitly
More informationAccounting and Auditing Update. Paul Lundy
Accounting and Auditing Update Paul Lundy Leases: Not Just for the Footnotes Anymore Significant Financial Statement Impact New lease standard generally requires all leases to be capitalized and recognized
More informationApplying IFRS. New IASB leases standard oilfield services. December 2016
Applying IFRS New IASB leases standard oilfield services December 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease 3 1.3 Identifying and separating
More informationFASB/IASB Update Part II
American Accounting Association FASB/IASB Update Part II Tom Linsmeier FASB Member August 3, 2014 The views expressed in this presentation are those of the presenters. Official positions of the FASB/IASB
More informationREAL ESTATE PERSPECTIVE ON NEW LEASE ACCOUNTING STANDARDS
VALUATION & ADVISORY REAL ESTATE PERSPECTIVE ON NEW LEASE ACCOUNTING STANDARDS BY JOHN CORBETT, MAI, ASA, FRICS AND MARC R. SHAPIRO, MAI, MRICS INTRODUCTION The Financial Accounting Standards Board (FASB)
More informationAccounting for revenue is changing
Accounting for revenue is changing What s the impact on housebuilders? March 2017 The new revenue standard effective from 1 January 2018 is likely to affect the way you account for revenue. But it is more
More informationCenter for Plain English Accounting
Report April 18, 2018 Center for Plain English Accounting AICPA s National A&A Resource Center Debits and Credits Associated with New Lease Accounting Standard CPEA Lease Standard Implementation Series
More informationIFRS 16 Leases. A summary of IFRS 16 and its effects. 22 February 2017
IFRS 16 Leases A summary of IFRS 16 and its effects 22 February 2017 Overview of IFRS 16 Leases Leases will have a single accounting model for all leases with two exceptions ( low-value assets and short
More informationImplementation: Revenue and Leases
Implementation: Revenue and Leases Agenda Ref 12B FASB/IASB Joint Board Meeting June 19, 2018 This presentation has been prepared for discussion at a public meeting of the International Accounting Standards
More informationASC Topic 842 Leases. September 25 &
ASC Topic 842 Leases September 25 & 26 2017 This presentation is intended solely for the information and use of the EEI and AGA and is not intended to be and should not be used by anyone other than these
More informationWhat private companies need to know about applying the new lease standard
What private companies need to know about applying the new lease standard In February 26, the FASB issued Accounting Standards Update (ASU) No. 26-, Leases (codified as Accounting Standards Codification
More informationNew Accounting Rules for Revenue and Leases
New Accounting Rules for Revenue and Leases CFMA Education Summit March 22, 2017 Presented by: Carole McNees, CPA, Partner, Plante & Moran, PLLC Recently released standards New guidance from the Financial
More informationAccounting. Overview of the New Revenue Recognition Standard. Fort Worth Chapter TSCPA Free CPE Day
Accounting Update - 2015 Overview of the New Revenue Recognition Standard 1 Fort Worth Chapter TSCPA Free CPE Day 2015 1 ASC Topic 606, Revenue from Contracts with Customers Issued in May 2014 Supersedes
More informationTechnical Line FASB final guidance
No. 2018-11 11 October 2018 Technical Line FASB final guidance How the new leases standard affects telecom and media and entertainment entities In this issue: Overview... 1 Key considerations... 2 Scope
More informationAccounting Update. Anne Cloutier, CPA, FHFMA Principal March 27, 2015
Accounting Update Anne Cloutier, CPA, FHFMA Principal March 27, 2015 Current Accounting for Leases Capital leases - a lessee recognizes leased assets and liabilities on the balance sheet. Operating leases
More informationApplying the new lease accounting standard
Applying the new lease accounting standard In February 26, the FASB issued Accounting Standards Update (ASU) No. 26-, Leases (codified as Accounting Standards Codification Topic (ASC) 842). ASC 842 introduces
More informationFASB and IASB Continue Making Decisions on Lease Accounting
Accounting Journal Entry FASB and IASB Continue Making Decisions on Lease Accounting March 28, 2011 At recent meetings, the FASB and IASB (the boards ) have continued to make progress on the leases project,
More informationLease Accounti ng Standar
Lease Accounti ng Standar AGA Accounting Principles Committee August 14, 2017 AGENDA - INTRODUCTION - LEASE IDENTIFICATION/CLASSIFICATION - (Easement and Lateral Discussion) - LEASE vs NON LEASE - LEASE
More informationIt s Back Accounting for Asset Leases the new way!
It s Back Accounting for Asset Leases the new way! Kent Bettisworth BETTISWORTH & ASSOCIATES 2016 ERP Corp. All rights reserved. Controlling 2016 Conference September 12-15, 2016 in San Diego Kent Bettisworth
More informationNEW LEASE ACCOUNTING STANDARD
NEW LEASE ACCOUNTING STANDARD Accounting Standards Update (ASU) 2016-02, Leases & GASB 87, Leases LEASES Leases: Why a New Leases Standard? 1 IMPLEMENTATION TIMELINE January 2016 IASB issued IFRS 16, Leases
More informationLeases ASU September 20, 2017
Leases ASU 2016-02 September 20, 2017 Meet the Speakers Tonisha Spratte, CPA Senior Accountant Cherry Bekaert tspratte@cbh.com Matthew Mars Senior Accountant Cherry Bekaert mmars@cbh.com Agenda What is
More informationLease Update. June 2017 Addison, Texas
Lease Update June 2017 Addison, Texas William Bill Schneider CPA, CGMA Bill is an Audit Director at AT&T. AT&T delivers advanced mobile services, next-generation TV, highspeed internet and smart solutions
More information47.1% of organizations concerned about their ability to implement
Leases: Not Just for the 1 Lease Standard - Statistics 10 year project In 2014, $3.0 trillion in off-balance sheet lease commitments 47.1% of organizations concerned about their ability to implement 2
More informationLease Accounting Is Final Time to Prepare for Implementation
Copyright 2016 by the Construction Financial Management Association (CFMA). All rights reserved. This article first appeared in CFMA Building Profits (a member-only benefit) and is reprinted with permission.
More informationIFRS 16 : Lease accounting
IFRS 16 : Lease accounting Effective for accounting periods beginning on or after 1 January 2019 December 2017 IFRS 16: Lease accounting The IASB published the new IFRS 16 lease standard, in order to avoid
More informationApplying IFRS in Financial Services
Applying IFRS in Financial Services IASB issues new leases standard - financial services April 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease
More informationFinancial reporting developments. A comprehensive guide. Lease accounting. Accounting Standards Codification 842, Leases.
Financial reporting developments A comprehensive guide Lease accounting Accounting Standards Codification 842, Leases January 2019 To our clients and other friends Accounting Standard Codification (ASC)
More informationIASB issues new leases standard consumer products and retail
Applying IFRS in consumer products and retail IASB issues new leases standard consumer products and retail June 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition
More informationGrant Thornton October Leases. Navigating the guidance in ASC 842
Grant Thornton October 2018 Leases Navigating the guidance in ASC 842 This publication was created for general information purposes, and does not constitute professional advice on facts and circumstances
More informationHeadline Verdana Bold The evolutions of leases accounting under IFRS 16 Mariano Bruno, Carlo Laganà, Giuseppe Ambrosio, Deloitte & Touche S.p.A.
SHIPPING AND THE LAW 7^ Edition 25-26 October 2016 NAPLES Headline Verdana Bold The evolutions of leases accounting under IFRS 16 Mariano Bruno, Carlo Laganà, Giuseppe Ambrosio, Deloitte & Touche S.p.A.
More informationSummary of IFRS Exposure Draft Leases
The International Accounting Standards Board (IASB) recently issued a revised exposure draft (ED) relating to leases. Once these proposals are finalized the new guidance will replace the IAS 17 Leases.
More information10 TH European IFRS power and utilities roundtable
10 TH European IFRS power and utilities roundtable Victor Chan, Partner, EY 29 November 2016 European IFRS Power and Utilities roundtable IFRS 16 Leases: the journey so far November 2016 Agenda Overview
More informationRevenue / Lease Standard
Revenue / Lease Standard Introduction: The IADC AIP Revenue and Lessor Subcommittee have sought to evaluate the revenue recognition standard under Topic 606 and the lease standard under Topic 842 for applicability
More informationIFRS Update Guy Thomas, CPA, CA
IFRS Update Guy Thomas, CPA, CA D&Co IFRS update Agenda 3 new standards under IFRS IFRS 9 Financial Instruments IFRS 15 Revenue from Contracts with Customers IFRS 16 Leases Agenda Some narrow scope amendments
More informationLeases re-exposed: The impact on banks. IFRS Practical Matters in Banking. Overview. The Boards propose putting most leases on lessees balance sheets.
ey.com/ifrs September 2013 IFRS Practical Matters in Banking Leases re-exposed: The impact on banks On 16 May 2013, the IASB and FASB (collectively, the Boards) issued their revised exposure draft (revised
More informationDefining Issues. FASB and IASB Continue Discussions on Lease Accounting. Key Facts. June 2014, No
Defining Issues June 2014, No. 14-29 FASB and IASB Continue Discussions on Lease Accounting During the second quarter of 2014, the FASB and IASB (the Boards) continued redeliberations on the proposals
More informationAccounting Standards Update
Duquesne University 6th Annual Accounting CPE Conference Accounting Standards Update Amy Park, FASB Practice Fellow November 16, 2017 The views expressed in this presentation are those of the presenter.
More informationLEASES CONTINUING FORWARD IFRS NEWSLETTER
IFRS NEWSLETTER LEASES Issue 15, June 2014 Despite the significant divergence on key aspects of their lease proposals earlier this year, the Boards appear determined to finalise this long running project
More informationFinancial reporting developments. A comprehensive guide. Lease accounting. Accounting Standards Codification 842, Leases.
Financial reporting developments A comprehensive guide Lease accounting Accounting Standards Codification 842, Leases October 2018 To our clients and other friends Accounting Standard Codification (ASC)
More informationMONITORDAILY SPECIAL REPORT. Lease Accounting Project Update as of May 25, 2011 Prepared by Bill Bosco, Leasing 101
MONITORDAILY SPECIAL REPORT Lease Accounting Project Update as of May 25, 2011 Prepared by Bill Bosco, Leasing 101 The high volume of comment letters (780+) and numerous outreach meetings had common criticisms
More informationCPE regulations require online participants to take part in online questions
KPMG s CFO Financial Forum Webcast FASB/IASB Revised Lease Accounting Exposure Drafts A Detailed Look Part III: Lessor Accounting June 25, 2013 Administrative CPE regulations require online participants
More informationMeasuring Lease Liabilities EQUIPMENT LEASING AND FINANCE ASSOCIATION
Measuring Lease Liabilities EQUIPMENT LEASING AND FINANCE ASSOCIATION Presenters Kerrie Cadugan, Executive Director, EY Barbara Galaini, Chief Accounting Officer of the Americas, Avolon The views expressed
More informationGuide to auditing the implementation of ASC 842, Leases
Guide to auditing the implementation of ASC 842, Leases Revised July 2018 Contents Glossary of key terms... 1 1 Introduction... 2 1.1 Overview... 2 1.2 Leases audit roadmap for lessees... 3 1.3 Summary
More informationCurrent Developments. FASB, AICPA and SEC. Jim Brendel, CPA, CFE March 1, 2013
Current Developments FASB, AICPA and SEC Jim Brendel, CPA, CFE March 1, 2013 Agenda FASB Developments Selected Projects and Initiatives Revenue Recognition Leases Impairment of Intangible Assets Other
More informationIFRS 16 Leases. PICPA IFRS: New Standards and Updates Dubai. 28 April 2017
IFRS 16 Leases PICPA IFRS: New Standards and Updates Dubai 28 April 2017 1 More transparent lease accounting IFRS 16 will bring most leases on-balance sheet from 2019. All companies that lease assets for
More informationIn December 2003 the IASB issued a revised IAS 17 as part of its initial agenda of technical projects.
IFRS Standard 16 Leases In April 2001 the International Accounting Standards Board (IASB) adopted IAS 17 Leases, which had originally been issued by the International Accounting Standards Committee (IASC)
More informationLease & Finance Accountants Conference. September The Westin Charlotte Charlotte, NC
Lease & Finance Accountants Conference September 11-13 The Westin Charlotte Charlotte, NC H A N D O U T S Lessor Accounting under ASC 842 EQUIPMENT LEASING AND FINANCE ASSOCIATION Presenters Rod Hurd Chief
More informationFinancial reporting developments. A comprehensive guide. Lease accounting. Accounting Standards Codification 842, Leases.
Financial reporting developments A comprehensive guide Lease accounting Accounting Standards Codification 842, Leases January 2018 To our clients and other friends Accounting Standard Codification (ASC)
More informationLease & Finance Accountants Conference. September The Westin Charlotte Charlotte, NC
Lease & Finance Accountants Conference September 11-13 The Westin Charlotte Charlotte, NC H A N D O U T S Basic Principles of Lessors under ASC 842 Mamta Shori, Wells Fargo Equipment Finance Joe Sebik,
More informationNew Developments Summary
September 11, 2018 NDS 2018-11 New Developments Summary Implementation costs in a hosting arrangement ASU 2018-15 addresses customer accounting Summary The FASB issued ASU 2018-15, Customer s Accounting
More informationHERE WE GO AGAIN. THE NEW LEASE STANDARD (ASC TOPIC 842) February Internal Audit, Risk, Business & Technology Consulting
HERE WE GO AGAIN THE NEW LEASE STANDARD (ASC TOPIC 842) February 2018 Internal Audit, Risk, Business & Technology Consulting PRESENTERS Edna Lopez Protiviti Managing Director edna.lopez@protiviti.com Scott
More informationDefining Issues February 2013, No. 13-8
Issues & Trends Defining Issues February 2013, No. 13-8 Revenue Recognition: Boards Decide Scope and Industry-Specific Issues At their January 2013 meeting, the FASB and IASB (the Boards) made tentative
More informationLease Accounting and simplease Accounting Updates. Trevor Warren & Jason Reljac
Lease Accounting and simplease Accounting Updates Trevor Warren & Jason Reljac Today s Agenda Overview Scope and Definition of a Lease Lease Classification Lessee Accounting Financial Statement Impact
More informationApplying IFRS. New IASB leases standard Mining and Metals October 2016
Applying IFRS New IASB leases standard Mining and Metals October 2016 Contents Overview 2 1. Key considerations 3 1.1 Scope and scope exclusions 3 1.2 Definition of a lease 4 1.3 Arrangements entered into
More informationCountdown to MFRS 16 Are you ready?
Volume 6 - Issue 3 8 June 018 Countdown to MFRS 16 Are you ready? MFRS 16 sets a new turning point for lease accounting. With the requirement for most operating leases to be recognized on the balance sheet,
More informationIFRS 15 and IFRS 16 Webinar
CPA Ireland Skillnet CPA Ireland Skillnet, is a training network that is funded by Skillnets, a state funded, enterprise led support body dedicated to the promotion and facilitation of training and up-skilling
More informationLease Accounting - New Changes in US, International and Government Accounting Standards
Lease Accounting - New Changes in US, International and Government Accounting Standards Roberta J. Cable, Ph.D., CMA Patricia Healy, CPA, CMA Lubin School of Business Administration, Pace University, USA
More information