Genuine Learning Blog
The Genuine Learning Blog is a video series designed to keep you abreast of the latest developments in accounting and auditing. This is a not a teaser, marketing tool. This blog breaking down new proposals from GASB, FASB, and the AICPA into short manageable videos. Watching this series will make you better informed than your peers!
The AICPA has updated their Practice Aid on Accounting for and auditing of digital assets to address more niche Codification topics. The update includes discussion of accounting for broker dealers as well as investment companies. It also provides guidance on determining principal markets for fair value. The Digital Assets Working Group has been great in providing accounting and auditing guidance for entities as this topic is not well addressed in authoritative literature.
This week’s blog looks at the recently proposed GASB Implementation Guide for 2021 which provides questions and answers on a variety of topics ranging from derivative instruments and fiduciary activities to leases and nonexchange transactions. Comments are due February 15, 2021.
The AICPA has rolled out a Toolkit to Assist Firms in identifying affiliates under the new ET Section 1.224.020. In June 2019, the PEEC rolled out a new definition of affiliate for State and Local Governments. However, the new rules were complex so the AICPA has released a decision tree for identifying affiliates as well as a variety of tools that firms can use to determine their compliance with the independence standards.
The AICPA’s Auditing Standards Board has issued some proposed targeted improvements to guidance on the use of specialists and external pricing sources. The proposal incorporates some PCAOB guidance and provides additional application guidance for AU-C 501, 540 and 620. Comments are due February 4, 2021.
https://youtu.be/kmSPaQrk_IQ This week's blog includes two proposals from the FASB. The first proposed ASU addresses three implementation issues identified in implementation of ASU 2016-02, Leases. The second proposal addresses the scope of reference rate reform. Both...
https://youtu.be/S83NcpsWbcQ Biennially the Association for Certified Fraud Examiners releases its Report to the Nations. The 2020 version provides insight into the type of fraud that were most common, who perpetrated the fraud and how they were caught. The report...
https://youtu.be/LOyi7k9xqZ8 We all know that COVID is impacting businesses in more ways than one. Unsurprisingly, we've seen an uptick in fraud during the COVID era. The ACFE has issued its September 2020 report providing interesting insights into fraud during COVID...
The AICPA’s Professional Ethics Executive Committee (PEEC) is re-proposing an interpretation for staff augmentation. This proposal would further limit the ability of firms to offer staff augmentation services. The proposal also offers two areas currently not addressed in the proposal as potential changes where PEEC is looking for additional feedback. Comments are due December 8, 2020.
Each quarter we review what issued as final standards during the quarter. While the Genuine Learning Blog focuses on what’s coming down the pike and tries to encourage participation in due process, we also know its important to be aware of what get’s finalized. The blog looks at the items issued by the AICPA, FASB and GASB that will be effective in the near future.
If you thought we were done with Revenue Recognition and Topic 606, you would definitely be surprised to hear that the Financial Accounting Standards Board (FASB) issued an exposure draft this morning to address revenue recognition for franchisors by offering a practical expedient. This standard was foreshadowed in the discussion for ASU 2020-05 which delayed revenue recognition by one year for private entities. Comments are due November 5th.
The AICPA has issued a Technical Q&A (TQA) titled Accounting for Lease Components in Type A Life Care Contracts by Continuing Care Retirement Communities. Issued August 2020, the TQA addresses common questions in the healthcare arena related to the application of lease accounting (Topic 842) for Type A Life Care Contracts. The TQA provides CCRCs with common considerations to determine whether there is a lease and if so, what the appropriate accounting would be. This has been a hot topic for the CCRC industry and many will be grateful to have some guidelines for accounting purposes which should reduce diversity in practice.
Cryptocurrency is becoming a more recognized transaction with more entities participating in this ecosystem. The AICPA has issued non-authoritative guidance on accounting and auditing digital assets. Current FASB does not have authoritative guidance in this area, so the practice aid addresses some common considerations. In addition, it addresses the questions firms need to address before accepting a client and provides procedures to ensure that digital asset risks are properly identified and an appropriate audit response is performed. We’ll take a high-level look at some of the considerations for those contemplating moving into this area.
The AICPA has issued a proposed SAS to clarify and improve the risk assessment standards. For the past few years, the AICPA has focused its audit quality initiatives on risk assessment. Now that the IAASB has issued a final standard, the AICPA is proposing changes to align with the ISAs but also help firms better understand how to use risk assessment to plan and perform effective and efficient audits. This video blog covers the major changes in the standards. Comments are due November 25th.
The AICPA has issued nonauthoritative guidance from its Materiality Working Group of ASEC designed to assist practitioners in determining when there is a material misstatement in an attest engagement. As many attestation engagement include subject matter that are not quantifiable, the guidance provides examples of how to insure compliance with the attest standards and truly evaluate findings in a variety of subject matter.
FASB has proposed its newest PCC alternative for private company GAAP. The proposal would permit the use of 409A valuations for GAAP purposes when valuating equity based options. Comments are due October 1.
https://youtu.be/u3mp8yA8YZc GAO has issued an audit alert to provide some considerations for auditors as to how COVID19 will impact Yellow Book audits. The alert addresses risk assessment, audit evidence, quality control. While nonauthoritative, the alert can help...
FASB has issued a proposed Concept Statement addressing the definition of elements of financial statements. The 10 key elements (assets, liabilities, equity etc.) are getting an update to better define the key components that describe an element. Comments are due November 13th.
GASB has proposed its Exposure Draft which would improve the financial reporting model. The proposal includes changes to MD&A, extraordinary items, presentation of proprietary funds, and implements the short-term financial resource measurement focus for governmental funds which was introduced in an ED earlier this month. Comments are due February 26, 2021.
Disclaimer: The information contained within this blog is provided for informational purposes only. Viewing this material does not qualify for CPE credit. Additionally, this general knowledge is not intended to substitute for obtaining accounting, legal, or financial advice from a professional accountant with specific knowledge of your organization. Finally, watching this blog and/or subscribing to the newsletter do not create an accountant-client relationship.
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