Closing the GAAP: New US GAAP Pronouncements

www.pwc.com/ca
Closing the GAAP: New US
GAAP Pronouncements
(includes developments to December 31, 2014)
Contents
2 Developments related
to 2014 calendar years
4 Developments related
to 2015 calendar years
8 Developments related
to 2016 calendar years
9 Developments related
to 2017 calendar years
The following summarizes US GAAP pronouncements that must be applied, if
applicable, for the first time by a calendar year-end entity that prepares financial
statements in accordance with US GAAP. This newsletter sets out new requirements by
the calendar year in which they are first effective.
The listing includes updates from the FASB Accounting Standard Updates ("ASU").
This ACS newsletter supersedes the information in previous Newsletter 2014-098 and
will be updated quarterly. Developments since the previous newsletter, if any, are
highlighted in yellow.
While we have attempted to make this newsletter as complete as possible, it may not
include all changes or modifications to existing authoritative literature that may affect
a particular enterprise.
Developments related to 2014 calendar years
Reference
Pronouncement and Effective Date Impacting 2014 Calendar Years
ASU
2014-17
Topic 805
Pushdown accounting
Provides guidance on whether and at what threshold an acquired entity that is a business or a nonprofit activity can apply pushdown accounting in its separate financial statements.
Effective on November 18, 2014.
Learning more: US2014-08
ASU
2014-06
Technical corrections and improvements related to glossary terms
Amendments affect a wide variety of topics in the Codification. The tables in paragraphs 1, 6, 103
and 412 of this ASU summarize the amendments.
The amendments do not have transition guidance and are effective upon issuance for both public
and nonpublic entities.
ASU
2013-11
Topic 740
Income taxes
Amended to provide guidance on financial statement presentation of an unrecognized tax benefit
when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.
Effective for public entities for years, and interim periods within those years, beginning after
December 15, 2013.
ASU
2013-08
Topic 946
Amendments related to investment companies
Amends (i) guidance for determining whether an entity is an investment company, and (ii)
measurement and disclosure requirements for all entities that are investment entities.
Effective for years, and interim periods within those years, beginning after December 15, 2013.
Learning more: DL 2013-14
ASU
2013-07
Topic 205
Liquidation basis of accounting
Provides guidance on (i) when an entity should apply the liquidation basis of accounting, and (ii)
recognition and measurement of assets and liabilities, and requirements for preparation of financial
statements, using the liquidation basis of accounting.
Effective for entities that determine liquidation is imminent during years, and interim periods within
those years, beginning after December 15, 2013.
ASU
2013-05
Topic 830
Accounting for cumulative translation adjustments
Amends cumulative translation adjustment derecognition guidance in particular when (i) an entity
ceases to have a controlling financial interest in certain subsidiaries or groups of assets within a
foreign entity, or (ii) there is a loss of a controlling financial interest in a foreign entity or a step
acquisition involving an equity method investment that is a foreign entity.
Effective for public entities for years, and interim periods within those years, beginning after
December 15, 2013.
Learning more: DL 2013-10
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2
Developments related to 2014 calendar years
Reference
Pronouncement and Effective Date Impacting 2014 Calendar Years
ASU
2013-04
Topic 405
Obligations resulting from joint and several liability arrangements
Provides guidance for the recognition, measurement and disclosure of obligations resulting from
joint and several liability arrangements for which the total amount of the obligation is fixed at the
reporting date and for which no specific guidance exists.
Effective for public entities for years, and interim periods within those years, beginning after
December 15, 2013. For nonpublic entities, effective for years ending after December 15, 2014, and
interim and annual periods thereafter.
Learning more: DL 2013-20
ASU
2013-02
Topic 220
Reporting amounts reclassified out of accumulated other comprehensive income (“AOCI”)
Amended to require an entity to present information about reclassification adjustments from AOCI
in their annual financial statements in a single note or on the face of the financial statements.
Effective for nonpublic entities for reporting periods beginning after December 15, 2013.
ASU
2012-05
Topic 230
Not-for-profit entities (“NFPs”) and statement of cash flows
Amended to provide guidance for NFPs on the classification of cash receipts from the sale of
donated financial assets.
Effective for years, and interim periods within those years, beginning after June 15, 2013.
ASU
2012-04
Technical corrections and improvements
Amendments to a wide variety of topics in the Codification. The status tables in paragraphs 288-398
of this ASU list all topics affected by these amendments.
For nonpublic entities, the amendments that are subject to the transition guidance will be effective
for years beginning after December 15, 2013.
ASU
2012-01
Topic 954
Health care entities: Continuing care retirement communities and refundable advance fees
Clarifies reporting for refundable advance fees received by continuing care retirement communities.
Effective for non-public entities for years beginning after December 15, 2013.
ASU
2011-06
Topic 720
Fees paid to the federal government by health insurers
Addresses questions about how health insurers should recognize and classify in their income
statements fees mandated by the Patient Protection and Affordable Care Act as amended by the
Health Care and Education Reconciliation Act.
Effective for years beginning after December 31, 2013 when the fee initially becomes effective.
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Developments related to 2015 calendar years
Reference
Pronouncement and Effective Date Impacting 2015 Calendar Years
ASU
2014-14
Topic 310-40
Classification of government-guaranteed mortgage loans upon foreclosure
Amended to provide guidance on how to classify and measure certain government-guaranteed
mortgage loans upon foreclosure.
Effective for public business entities for years, and interim periods with those years, beginning after
December 15, 2014. For all other entities, effective for years ending after December 15, 2015 and
interim periods beginning after December 15, 2015.
ASU
2014-11
Topic 860
Repurchase-to-maturity transactions, repurchase financings and disclosures
Amended to (i) change the accounting for repurchase-to-maturity transactions and linked
repurchase financings to secured borrowing accounting, and (ii) introduce new disclosure
requirements for certain transactions that involve a transfer of a financial asset accounted for as a
sale, and for repurchase agreements, securities lending transactions and repurchase-to-maturity
transactions accounted for as secured borrowings.
The accounting changes are effective for public business entities for years, and the first interim
period, beginning after December 15, 2014. For all other entities, the accounting changes are
effective for years beginning after December 15, 2014, and interim periods beginning after
December 15, 2015.
For public business entities, the disclosure requirement for certain transactions accounted for as a
sale is effective for years and interim periods beginning after December 15, 2014, whereas the
disclosure requirement for repurchase agreements, securities lending transactions, and repurchaseto-maturity transactions accounted for as secured borrowings is effective for years beginning after
December 15, 2014, and for interim periods beginning after March 15, 2015. For all other entities,
both new disclosure requirements are effective for years beginning after December 15, 2014, and
interim periods beginning after December 15, 2015.
ASU
2014-10
Topics 915 and
810
Development stage entities and elimination of certain financial reporting requirements
The amendments (i) remove the definition of development stage entity from the Master Glossary of
the Codification; (ii) remove incremental financial reporting requirements from US GAAP for
development stage entities; (iii) clarify that the guidance in Topic 275, Risks and Uncertainties, is
applicable to entities that have not commenced planned principal operations, and (iv) eliminate the
exception provided to development stage entities in Topic 810, Consolidation, for determining
whether an entity is a variable interest entity on the basis of the amount of investment equity at
risk.
The amendments related to Topics 915 and 275 are effective for public business entities for years
beginning after December 15, 2014, and interim periods therein. Effective for all other entities for
years beginning after December 15, 2014, and interim reporting periods beginning after December
15, 2015.
The amendments related to Topic 810 are effective for public business entities for years beginning
after December 15, 2015, and interim periods therein. Effective for all other entities for years
beginning after December 15, 2016, and interim reporting periods beginning after December 15,
2017.
Learning more: US2014-02
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Developments related to 2015 calendar years
Reference
Pronouncement and Effective Date Impacting 2015 Calendar Years
ASU
2014-08
Topics 205
and 360
Discontinued operations and disposals
The amendments change the criteria for reporting discontinued operations and add new disclosure
requirements for discontinued operations and individually significant components of an entity that
are disposed of or classified as held for sale but do not meet the definition of discontinued
operation.
Effective for public business entities and certain not-for-profit entities for new disposals and new
classifications of assets held for sale in years beginning on/after December 15, 2014, and interim
periods within those years. Effective for all other entities, including most private companies, for
years beginning on/after December 15, 2014, and interim periods within years beginning on/after
December 15, 2015.
Learning more: DL 2014-08
ASU
2014-07
Topic 810
Common control leasing arrangements and VIE guidance
Amendments provide an elective accounting alternative for private companies in applying variable
interest entities guidance to lessor entities under common control.
Effective for years beginning after December 15, 2014, and interim periods within years beginning
after December 15, 2015.
Learning more: US2014-03
ASU
2014-05
Topic 853
Service concession arrangements
Applies to an operating entity of a service concession arrangement entered into with a public sector
entity grantor when certain conditions are met. Specifies that (i) such service concession
arrangements should not be accounted for as a lease in accordance with Topic 840, Leases; (ii) the
operating entity should refer to other Topics as applicable to account for various aspects of the
arrangement, and (iii) the infrastructure used in the arrangement should not be recognized as
property, plant and equipment of the operating entity.
Effective for public business entities for years beginning after December 15, 2014, and interim
periods within those years. Effective for other entities for years beginning after December 15, 2014,
and interim periods within years beginning after December 15, 2015.
ASU
2014-04
Topic 310-40
Troubled debt restructurings and reclassification of residential real estate collateralized consumer
mortgage loans upon foreclosure
Amended to (i) clarify when an in-substance repossession or foreclosure occurs such that a creditor
is considered to have received physical possession of residential real estate property collateralizing
a consumer mortgage loan, and (ii) require additional annual and interim disclosures.
Effective for public business entities for years beginning after December 15, 2014, and interim
periods within those years. Effective for other entities for years beginning after December 15, 2014,
and interim periods within years beginning after December 15, 2015.
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Developments related to 2015 calendar years
Reference
Pronouncement and Effective Date Impacting 2015 Calendar Years
ASU
2014-03
Topic 815
Accounting for certain receive-variable, pay-fixed interest rate swaps
For all entities except public business entities, not-for-profit entities, employee benefit plans within
the scope of Topics 960 through 965 on plan accounting, and financial institutions, amended to
allow the use of a simplified hedge accounting approach to account for swaps that are entered into
for the purposes of economically converting a variable-rate borrowing into a fixed rate borrowing.
Effective for years beginning after December 15, 2014, and interim periods within years beginning
after December 15, 2015.
Learning more: DL 2014-06
ASU
2014-02
Topic 350
Accounting for goodwill
For all entities except public business entities, not-for-profit entities and employee benefit plans
within the scope of Topics 960 through 965 on plan accounting, amended to allow an alternative for
the subsequent measurement of goodwill.
Applies prospectively to goodwill existing as of the beginning of the period of adoption and new
goodwill recognized in years beginning after December 15, 2014, and interim periods within years
beginning after December 15, 2015.
Learning more: DL 2014-05
ASU
2014-01
Topic 323
Investments in qualified affordable housing projects – equity method and joint ventures
Revises the accounting for, and disclosures related to, investments in qualified affordable housing
projects through flow-through, limited liability entities.
Effective for public business entities for years beginning after December 15, 2014, and interim
periods within those years. Effective for other entities for years beginning after December 15, 2014,
and interim periods within years beginning after December 15, 2015.
Learning more: DL 2014-02
ASU
2013-11
Topic 740
Income taxes
Amended to provide guidance on financial statement presentation of an unrecognized tax benefit
when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.
Effective for nonpublic entities for years, and interim periods within those years, beginning after
December 15, 2014.
ASU
2013-06
Topic 958
NPOs and services received from personnel of an affiliate
Provides guidance for not-for-profit entities (“NPOs”) related to recognizing and measuring services
received from personnel of an affiliate.
Effective for years beginning after June 15, 2014, and interim and annual periods thereafter.
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Developments related to 2015 calendar years
Reference
Pronouncement and Effective Date Impacting 2015 Calendar Years
ASU
2013-05
Topic 830
Accounting for cumulative translation adjustments (“CTA”)
Amends cumulative translation adjustment derecognition guidance in particular when (i) an entity
ceases to have a controlling financial interest in certain subsidiaries or groups of assets within a
foreign entity, or (ii) there is a loss of a controlling financial interest in a foreign entity or a step
acquisition involving an equity method investment that is a foreign entity.
Effective for nonpublic entities for years beginning after December 15, 2014, and interim and
annual periods thereafter.
Learning more: DL 2013-10
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Developments related to 2016 calendar years
Reference
ASU
2014-18
Topic 805
Pronouncement and Effective Date Impacting 2016 Calendar Years
Accounting alternative for certain intangible assets acquired in a business combination
Amended to provide an accounting alternative for certain identifiable intangible assets acquired in a
business combination.
Effective for all entities except for public business entities and not-for-profit entities upon the
occurrence of the first transaction within the scope of the accounting alternative in years beginning
after December 15, 2015. If the first in-scope transaction occurs in years beginning after December
15, 2016, the elective adoption will be effective in the interim period that includes the date of that
first in-scope transaction.
ASU
2014-16
Topic 815
Hybrid financial instruments issued in the form of a share
Amended to clarify how current GAAP should be interpreted in evaluating the economic
characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form
of a share.
Effective for public business entities for years, and interim periods within those years, beginning
after December 15, 2015. Effective for all other entities for years beginning after December 15,
2015, and interim periods within years beginning after December 15, 2016.
ASU
2014-15
Topic 205-40
Disclosures related to uncertainties about going concern
Amended to provide guidance about management’s responsibility to evaluate whether there is
substantial doubt about an entity’s ability to continue as a going concern or to provide related
footnote disclosures.
Effective for years ending after December 15, 2016 and for years and interim periods thereafter.
Learning more: US2014-07
ASU
2014-13
Topic 810
Financial assets and liabilities of a consolidated collateralized financing entity
Amended to clarify measurement of financial assets and financial liabilities of a consolidated
collateralized financing entity.
Effective for public business entities for years, and interim periods with those years, beginning after
December 15, 2015. For entities other than public business entities, effective for years ending after
December 15, 2016 and interim periods beginning after December 15, 2016.
Learning more: US2014-11
ASU
2014-12
Topic 718
Share-based payments and performance targets achieved after the requisite service period
Amended to require that a performance target that affects vesting and that could be achieved after
the requisite service period be treated as a performance condition.
Effective for all entities for years, and interim periods within those years, beginning after December
15, 2015.
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Developments related to 2017 calendar years
Reference
Pronouncement and Effective Date Impacting 2017 Calendar Years
ASU
2014-09
Topic 606
Revenue from contracts with customers
Supersedes (i) revenue recognition requirements in Topic 605 and most related industry-specific
guidance, and (ii) cost guidance included in Subtopic 605-35, Revenue Recognition—ConstructionType and Production-Type Contracts. Amends existing requirements for recognition of a gain/loss
on the transfer of nonfinancial assets that are not in a contract with a customer (for example, assets
within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the
scope of Topic 350, Intangibles—Goodwill and Other) to be consistent with the new requirements.
Effective for public entities for years beginning after December 15, 2016 including interim periods
with those years. Effective for all other entities for years beginning after December 15, 2017 and
interim periods within years beginning after December 15, 2018.
Learning more: US2014-01
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