Accounting Standards Transition

On December 1, 2017, the SEC’s Division of Corporation Finance updated its Financial Reporting Manual for the following changes:

  • Revising guidance related to the pro forma impact of adopting new accounting standards (Sections 3250.1(m)-(n)), including clarifying that if a registrant:
    • acquires a significant business, and such business adopts a new accounting standard as of a

On October 16, 2017, Clermont Partners released a survey on the reliance of active investors on non-GAAP versus GAAP reporting, intangible assets and non-financial metrics.  Unlike passive investors who invest in index funds, active investors select securities to buy and sell.  Fifty-six active investors, focused on a variety of industries and investment strategies, participated in

On August 22, 2017, Stephen Deane, CFA, Investor Engagement Advisor, Office of the Investor Advocate, gave a speech addressing two proposed updates issued by FASB in 2015 (one that would apply to GAAP and the other that would apply to FASB’s Conceptual Framework) that refer to materiality as a legal concept, or rather rely on

On June 8, 2017, SEC Chief Accountant Wesley Bricker gave a speech titled “Advancing the Role of Credible Financial Reporting in the Capital Markets” at the 36th Annual SEC and Financial Reporting Institute Conference. Mr. Bricker emphasized the importance of reliable accounting and effective control over financial reporting in protecting investors and the capital markets.

In a pair of recent speeches, SEC Chief Accountant Wesley R. Bricker emphasized the importance of reinforcing and advancing credible financial reporting through effective audit committees and effective internal control over financial reporting (“ICFR”).  Mr. Bricker highlighted several ways to advance the role and effectiveness of audit committees, including the following:

  • Audit committees should understand

The Chair of the Securities and Exchange Commission Mary Jo White recently commented on the significance of high-quality accounting standards.  The speech noted the need to support continued work toward the globally accepted accounting standards.  In recent months, representatives of the Office of the Chief Accountant within the Commission had noted that the effort to

On May 17, 2016, the staff of the SEC Division of Corporation Finance (the “Staff”) issued 12 new Compliance & Disclosure Interpretations (“C&DIs”) on the use of non-GAAP financial measures, which has recently been an area of concern for the SEC.  The C&DIs cover a variety of topics, including compliance with Rule 100(b) of Regulation

On May 5, 2016, SEC Deputy Chief Accountant Wesley Bricker and the SEC Division of Corporation Finance’s Chief Accountant Mark Kronforst spoke at the 2016 Baruch College Financial Reporting Conference. Deputy Chief Accountant Bricker identified several specific concerns with non-GAAP reporting practices.  First, the use of individually tailored accounting principles to calculate non-GAAP earnings fails