FASB News
Staff Document Offers Guidance on Accounting Implications of Tax Reform
On January 22, FASB’s staff issued a question-and-answer document to offer guidance on four questions that have emerged about the accounting ramifications of the new tax law. The document covers accounting for the new base erosion anti-abuse tax (BEAT), Global Intangible Low-Tax Income (GILTI), whether to discount the liability on the deemed repatriation of earnings, and whether to discount alternative minimum tax credits that become refundable.
Pharmaceutical Companies Ask for Delay of Lease Standard
Nine major pharmaceutical companies have asked FASB to delay by a year the effective date of the lease accounting standard, but the board may not consider the request. Absent a delay, the group asked the accounting board for flexibility interpreting the standard’s treatment of so-called embedded leases, which are provisions in servicing and outsourcing agreements that may qualify as leases under the new accounting. “FASB is assessing the letter and the concerns raised in it,” a spokesperson for the board said. “There’s no plan at this time to revise the effective dates of the leases standard.” Public companies will have to apply the lease standard for fiscal years starting after December 15, 2018; all other organizations have an extra year to begin applying the standard.
IASB News
Discussions to Continue for New Measurements of Operating Performance
The IASB is considering developing a measurement defined by a company’s management that expresses its views about operating performance. At its January 24-25 meeting, the board discussed when such a measurement would be required and where it should be located in a financial statement. “Today, many companies present non-GAAP measures outside their financial statements, which means that they are often poorly reconciled or not audited,” IASB Chairman Hans Hoogervorst said in a December podcast. “The idea is that bringing some of these measures into the financial statement could make them more transparent and subject to external audit.”
