Joint FASB/GASB Webcast to Explain Nonprofit and Governmental Accounting Rules

FASB and the GASB are holding a joint webcast on November 1 providing an overview of their recent accounting standards aimed at academics and business professionals who teach on not-for-profit and governmental financial reporting. Topics will include the reporting for conduit debt obligations, types of debt instruments issued by a state or local government on behalf of third parties. Third parties use this financing for projects such as affordable housing developments, not-for-profit hospitals, and economic development. The webcast will take place from 1:00 p.m. to 2:40 p.m. (EDT). The event is being offered at a time when many core accounting standards have been revised, and therefore textbooks and other learning material must be updated. Accountants and other finance professionals also look to this information, much of which must be written by academics and, in some cases, translated to other languages.

Commenters Say Proposed Deferral for Insurance Accounting Would Create Mismatch for Reinsurers

Senior accountants from some of the nation’s largest insurance companies have told FASB that its proposal to defer the effective date of new accounting for long-term insurance contracts poses adoption issues for reinsurers unless they are granted a transition exception. In comment letters, Cigna Corp., Athene Holding Limited, and Unum Group asked FASB to carve out a practical expedient for reinsurance contracts so insurers can adopt the changes at the same time for those blocks of contracts. The companies said the staggered effective dates between large public and “all other companies” the board has proposed would create asymmetry and add cost and complexity to reinsurers’ rule adoption efforts. “We have concerns over the different effective dates for larger public companies and entities defined as ‘other than larger public companies’ within the proposal as it applies to reinsurance,” Roger L. VanCleave, vice president of technical accounting at Unum Group said in a comment letter to the board.

FASB Aims to Finalize Proposed Simplifications for Distinguishing Liabilities and Equity in Early 2020

FASB Chairman Russell Golden has told the board’s main advisory body it plans to take up discussions in December on a narrow proposal that simplifies rules for financial instruments with characteristics of liabilities and equity, one of the most complex accounting issues and the cause of frequent restatements. In July, FASB issued proposed Accounting Standards Update (ASU), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under the changes, the number of accounting models for convertible debt instruments and convertible preferred stock would be reduced from the current five, which accountants have said are complex and difficult to navigate. The rules are also costly to comply with, requiring the maintenance of controls and audit costs. Reducing the number of accounting models for convertible instruments would simplify the rules, enabling more consistent and more relevant information for financial statement users to understand, according to the proposal. It would also result in fewer manual adjustments in users’ analyses. Golden told the Financial Accounting Standards Advisory Council that he hopes the board can finalize the proposed standards by the first or second quarter of 2020.