Credit Losses, Leases Among Topics at CPE Forum
FASB’s semiannual online training forum for professionals and companies that offer accounting for continuing professional education (CPE) will be held on March 22, according to a board alert. “Our CPE provider online training forum helps keep professional accounting educators informed about recent standards and activities so they can share that information with their clients and colleagues,” FASB Chair Richard Jones said in a statement. The event, IN FOCUS: CPE Provider Forum, will be live-streamed from 1:00 to 3:00 p.m., and attendees who want to participate in the live forum must register in advance. The event will feature various financial reporting topics, including implementation activities for ASC Topic 842, Leases, and Topic 326, Credit Losses. The leases guidance, issued in 2016, require, the full magnitude of a company’s long-term lease obligations to be recorded on the balance sheet. It took effect in 2019 for public companies; private companies must adopt the standard this year.
SEC Official Named PCAOB Chief of Staff
PCAOB Chair Erica Williams hired Omid Harraf from the SEC and made him her chief of staff, effective immediately, the board said on March 7. The chief of staff advises the chair on all PCAOB issues and works closely with other board members and staff. At the SEC, Harraf was deputy chief counsel in the Office of the Chief Accountant. Before that, he was senior special counsel for legal policy in the SEC’s Office of the General Counsel. “The Chief of Staff plays a critical role in overseeing every part of the PCAOB,” Chair Williams said in a statement. “We are fortunate to have Omid join us, given his strong commitment to investor protection and his wide range of experience in capital markets oversight, securities law and public policy.” Harraf was an associate at international law firm Hogan Lovells before joining the SEC. Previously, he worked as an adviser at the Commodity Futures Trading Commission, the U.S. State Department, and two multinational organizations.
Technical Reporting Issues on Shares, Warrants for SPACs to be Addressed
The IFRS Interpretations Committee’s March 16 discussions will address technical questions about reporting shares and warrants in relation to Special Purpose Acquisition Companies (SPAC), according to meeting papers. SPACs are shell companies created for the sole purpose of bringing a private operating company public. Use of SPACs as a vehicle to file initial public offerings (IPO) have grown substantially in recent years. In 2020, 248 new SPACs raised $82 billion, for example—more than five-times the volume in 2019, according to a Morgan Stanley global report. The transactions, however, can delve into highly complex accounting matters, such as financial instruments with characteristics of liabilities and equity, and warrants. SPACs typically have two types of shares after an IPO: founder shares (Class A) and public shares (Class B). The committee received a question about whether, in applying IAS 32, Financial Instruments: Presentation, a SPAC classifies public shares it issues as financial liabilities or equity instruments. At a high level, the issue would address whether a SPAC’s Class B shares meet the condition in paragraph 16(a)(i) of IAS 32, which requires the instrument to include no contractual obligation to deliver cash or another financial asset. In addition to the ordinary shares, a SPAC also issues warrants to both its founder shareholders and public investors.