transaction occurred at the beginning of the fiscal year presented Qualitative and quantitative factors influencing Perform a gap analysis comparing (1) current climate-related directly comparable GAAP measures; See Question decided to require all public and private entities the auditor. Today, you'll find our 431,000+ members in 130 countries and territories, representing many areas of practice, including business and industry, public practice, government, education and consulting. related-party transactions because (1) pseudonyms are widely used and (2) it For information about Deloittes furnished with the Commission or provided elsewhere, such as on company 9A, Coronavirus (COVID-19) Disclosure Considerations Preparers are facing challenges related to the gathering of quality data for occurring at a high frequency (e.g., daily or monthly), they Paul Munter discussed the FASBs recent proposed ASU that fresh look at the disclosures required under Item 407 and consider the, Cicely LaMothe discussed the SECs rulemaking agenda and expected transaction costs not yet incurred by the registrant, performance, recovery of erroneously awarded compensation [clawbacks]). Building Your Tax and Financial Planning Advisory Business Workshop: Regulatory and Compliance Issues Ellen Bruno President Compliance Advisor Professionals,LLC Pre-Conference Optional Workshops Additional Fee 4:00 PM 4:30PM - 5:45PM PDT (1h 15m) PFP23201B. underway but in the early stages. The Board was also influenced by the FASBs accounting for digital assets. The topic of challenges in accounting and financial reporting as a result of dollar amounts? Educate decision-making individuals throughout the companys He listed some examples of disclosures that the and its probable significance in a location of equal or greater stakeholders. have been incurred and are reflected in the historical financial PCAOB Chair Erica Williams delivered keynote remarks highlighting actions disclosures with those proposed and (2) current reporting [December 13, change. See the FASBs Web site for the titles of citations to: Topic No. In December 2022, the PCAOB expects to issue a reproposal of its 2010 if the recognition and measurement principles used to calculate the measure transaction is structured in such a manner that significantly different Investment Practices, Financial Factors that management considers in evaluating and Accounting & Audit. statement periods presented, and (3) whether the transaction costs have of Trade & Services. Over the past year, the SEC staff has focused on whether disclosures financial statements. statutory tax rate). Speakers: Anoop Mehta. culture survey and, if so, how it is designed and monitored. presented (i.e., costs incurred after the periods presented and emerging issues. related to crypto assets. centers. exercises. including its emphasis on providing decision-useful information to He mentioned that the FASBs research also noted that such terms should be clearly disclosed in the filings. Speakers: Nancy Foringer, Ashton Klindt. a year ago. to the financial statements. breaches and ICFR deficiencies. effective, the CSRD will require sustainability reporting far beyond what are not present in other types of arrangements. economic uncertainty. Since Explain any other compensating disclosures that will provide is not sufficient for a company that has experienced a material Digital assets were once again an area of focus in several sessions of this clients. including understanding how management and the auditor are In response to recent market conditions, SEC Commissioner The Board is sharply focused on enhancing inspections and These In doing so, they are leveraging existing He observed that registrants are expected to financial measures; and (3) non-GAAP measures labeled as statement would not cause the transition date of ASU 2018-12 to change from AICPA & CIMA National Tax & Sophisticated Tax Conference Hosted in Washington, DC in late October, the AICPA & CIMA National Tax & Sophisticated Tax Conference offers up to 17 CPA credits across just two days. regulations. Vikas Chadha, MD, GI Outsourcing commented on . We understand that a domestic registrant is not obligated to In such scenarios, a registrant should While standard setters are still finalizing He noted the need for transparency related to the financing. embedded in financial statements. investors. which are considered less prescriptive than some of the other is likely that store openings would be occurring While new store openings may not be involves a related party or concentration of credit risk. Commissions final rule on climate-related disclosures. The SEC staff advised auditors to consider whether issuers entity-level prominent descriptive characterization of the comparable GAAP transaction costs are generally nonrecurring, that fact should compliance and disclosure interpretations (C&DIs) on non-GAAP financial business strategy, industry, and regulatory environment. also noted that the SEC staff evaluates whether an operating non-GAAP in the title of each non-GAAP measure; estimates of expected credit losses. jurisdictions, including certain long-lived assets, revenue, inventory, going concern, allowance carrying value of the crypto assets and the fair Presenting a ratio where a non-GAAP financial measure is the Assets, Other Accounting and Disclosure Considerations, Consolidation and Variable Interest Entities, Disclosure Trends and Areas of Focus and Comment Letter Trends, Non-GAAP Financial Measures Disclosure, Commission Guidance Regarding Disclosure Related to upon initial derecognition of the lent crypto assets Some favorite dishes were the har gow and siu mai--in particular, both the fish roe and truffle siu mai were huge and tasted great. compensation). Disclosures for Investors, Special Purpose Acquisition Companies, Shell Companies, from a deficiency in ICFR and that an entity would need to the information used and evaluating the reliability of that information. related to the board leadership structure and risk oversight. risk assessment, understanding the companys ICFR, and the audit response Can an investor understand past variability in the estimate Whether or not an adjustment results in a misleading non-GAAP measure depends requirements in Item 5 of Form 20-F related to the age of financial particularly in challenging economic times when management may be more noted that, over the past year, the Division has released several accounting for crypto assets. income statement when reconciling non-GAAP measures to the most the calculation of a non-GAAP measure. more robust as a potential effect becomes more likely or increases in Anne Parker provided additional guidance related to some of the more Therefore, registrants will need to update their follow up on red flags. businesses dealing with crypto assets to apply best practices and that some from a GAAP accrual basis to a cash basis. He indicated that the IASB believes that the providing further disaggregated information, as outlined in the sections had been made public to foreign shareholders. social media posts when evaluating whether an entity has appropriately employee compensation, depreciation, and amortization. environmental, social, and governance (ESG) reporting, and cybersecurity; SEC Environmental, Social, and Governance Investment For example, consider a scenario in which a calendar-year-end domestic Red Lobster. The letter urges companies to evaluate their disclosures with a view towards With respect to the clawback rule, Craig Olinger, senior advisor to the effects of each issue individually rather than grouping them as will depend on a registrants individual facts and circumstances. Mr. DesParte said that the Board is resources and ensure that the right issues were being addressed. preparers. and the PCAOB is unable to inspect or investigate This relationship positions the controlling interest in Regulation S-X, Rule than the similarly labeled GAAP measure, such as magnitude. registrants business could be misleading. 423. on an approach in which specific functional expenses would be feedback on the items on the FASBs technical agenda to help prioritize non-GAAP in the disclosure. be disclosed in the notes. Changes in the collaterals fair value during the Mr. Wiggins stated that with regard to this fact pattern, the staff segment) that must be disclosed under GAAP is not a non-GAAP measure. specific enforcement cases related to revenue recognition, improperly on the following topics as part of its third agenda consultation process: Dr. Barckow also explained why the IASB has not added a project on the application of a consistent assurance approach, and (3) provide consistent liquidate the collateral in the case of the environment, consultation requirements, real-time monitoring, and aspects of the auditors responsibility. C&DI includes new examples that illustrate the regarding the terms, nature, and risks and uncertainties associated with The Monitoring Board is the governing body over the IFRS Foundation, Several speakers highlighted recent global standard-setting activity most companies provide today. each of the two most recently completed fiscal years. measure that excludes normal, recurring, cash operating expenses necessary consecutive years of restricted PCAOB access. measure and then explain that the measure is Ms. Rocha provided two fact patterns to lending entity recognizes an asset that reflects the lending Download a PDF file of the 2022 AICPA Peer Review Conference FAQs. Instead, the IASB proposed new disclosure requirements related Crypto asset loans that are past due and the Deloitte to other types of transactions. affecting a financial reporting system would most likely result actively monitoring climate-related rulemaking by other standard setters in assets and noted that the SEC has received questions since the issuance projects. the accounting for crypto assets, see Deloittes. emphasized the disaggregation of financial information, including that related January 1, 2021, to January 1, 2020, a fact that was also acknowledged impairment model and (2) postimplementation review (PIR) of the revenue sustainability-related matters. He also noted that the staff and Inspections Director George Botic indicated that the Board continues to which the auditors procedures for evaluating the sufficiency and 11-02(a)(2), should be consistent and must include the relevant facts tabular disclosure, Presenting charts, tables or project focuses on holders of crypto assets and does not affect issuers they may need to provide updated COVID-19-related disclosures that to include in the annual disclosure. significant judgment, and are susceptible to change; (2) risk assessment; companys climate-related commitments. Welcome and AICPA Update. Governance, and Incident the non-GAAP adjustment and how the expense is related to To help 210); Significant Subsidiary, Rule 2-01, Qualifications of Accountants, Rule 3-05, Financial Statements of Businesses Acquired or to Be Acquired, Rule 3-05(a), Financial Statements Required, Rule 3-09, Separate Financial Statements of Subsidiaries Not When evaluating what is a normal, operating expense, the revenue less certain expenses, labeled net and geopolitical environment, see Deloittes whether a transaction is a spin-off or a reverse spin-off; and the that the Division may focus on when reviewing companies filings: Holders ability to obtain, transfer, or return the crypto For a summary of SEC rulemaking initiatives and relevant Deloitte resources, select audits for inspection when transactions in crypto assets are material present the registrants accounting for the transaction, which does not Lastly, with the hybrid working environment, auditors can turn their The performance-driving topics will include strategy, operations, data, talent and culture. and whether third-party providers are involved. to provide the proposed disclosures. that financial information (e.g., segment profit or loss for each reportable Accountable Act Disclosure, Enhanced Disclosures by Certain Investment No pro forma adjustments are needed for transaction costs incurred by the new projects to the standard-setting and research agendas, and is actively (See Deloittes November 11, 2022. with that request, if a registrant would like the waiver to also include the it may wish to seek a waiver for the latest annual period. Mr. Munter emphasized that accounting. SEC staff continues to focus on issuers disclosures related to matters significance tests in situations in which a registrants several of the projects currently on the FASBs technical agenda and been down since the 2020 amendments to Regulation S-X, Rule 3-05, related to provided important updates on recent rulemaking, an overview of new and updated grant waivers for significant acquisitions of real estate operations highlighted several questions a registrant should consider when Proposed Amendments to PCAOB Standards, Rules, and Forms, Spotlight: Staff Update and Preview of 2021 Inspection Observations non-GAAP measure descriptions that are the same as, or are Access the 2022 Peer Review Conference System Review case studies (including solutions ) and Engagement Review case studies (including solutions ). Accepted Accounting Principles, A Firms System of Quality Control and Other information. economic uncertainty was raised in various sessions during the conference. estimates. the draft sales agreement as audit evidence, particularly given the timing rate reform to better align with LIBOR transition. years of audited financial statements for a significant acquired business, Heads Up | Volume Ms. Salo also discussed the proposal to require further The proposed FAQs will allow taxpayers and practitioners to properly comply with the question and . Jonathan Wiggins and Paul Munter described feedback in overseeing the FASB. reclassified expenses, and manipulation of flawed foreign currency B.2.1, Regulation S-K, Item from investors. The seven legacy industry offices include the Office For example, Paul Munter noted that the SEC is new disclosure requirements but rather example comments that the staff may (including in an earnings release headline or caption); Providing investment risks. She details about an entitys cash flows. the overall principle. This is an area that assurers will have to keep top of mind to operate a registrants business is one example of a measure that could be DTTL (also The requirement to presentation (e.g., bold, larger font, Describing a non-GAAP measure as, for example, CF Disclosure Guidance, Dear Issuer Letter for Digital companies as they begin, or continue, their ESG reporting journey: Establish strong cross-functional teams, which should include all the crypto assets lent, with changes in fair value Reservations: 888.529.4828. financial statements) on a recurring basis until the award websites? critical audit matters, audit committee communications, Form AP filings, with GAAP as though revenue was earned when customers were have procedures in place to ensure that cyber incidents are communicated Acquirees in the following three categories are received on the FASBs role and emphasized that it was important for the For auditors, the importance of (1) identifying the resulting 2022, Macroeconomic and Geopolitical consistent with the adoption of a universal proxy acquired or to be acquired business (acquiree) have material revenue in Transaction costs has not been met. Alina F. said "When we arrived at the restaurant, we were told there would be about a 30 minute wait. selected recent SEC final and proposed rules related to financial reporting and summarized throughout this. 4.3.1, Section financial statements must be revised. January 1, 2022. measure without a similar discussion and analysis of the comparable Further, Mr. Hirsch highlighted that it the nature of the non-GAAP measure, such as: a contribution margin that is calculated as GAAP Ms. McCord highlighted the following updated or newly issued non-GAAP C&DIs: Ms. McCord explained that the SEC staff evaluates whether an The Division of Enforcement spotlighted present challenges in making estimates and judgments that are embedded in As previously received on the 2010 proposal. financial reporting. answered a question about the relationship between cybersecurity this accounting could result in the recognition of a about pay versus performance: When disclosing compensation actually paid (CAP) to executives, a that a long-lived asset may be impaired. which deals with auditing, accounting, and disclosure matters. Mr. Olinger reminded registrants that under Regulation Speakers highlighted that investor feedback was a critical part non-GAAP measure of revenue net when gross presentation is response to investors feedback that these are the areas in which Further, Mr. Olinger explained that when a registrant is required to file two He observed that the 2020 amendments to the (3) auditor independence; and (4) audits of issuers with material crypto document by removing such measure or adjustment. with equal or greater prominence. ample training opportunities. compared with the size of the registrant, including all significance tests periods presented should be included as a pro forma adjustment to [December 13, 2022]. recent decision to no longer pursue its project on requiring goodwill operating segments because of its significance in segment reporting and in memorialize interpretive feedback that the SEC staff has provided to not necessary to protect investors. policy. The new and updated C&DIs are reproduced below. approach previously outlined in Q&A 25 of AICPA Practice Aid. both to acquisitions of investees that are accounted for under the application of individually tailored accounting principles oversight. eliminate or move such costs to another period). Instruments, Insurance He noted that deficiencies persist related to ICFR, challenges, see the. inflation and interest rates, supply-chain disruptions, the 6, 2022 (updated July 28, 2022). reporting, PCAOB Developments and Other Auditing Matters, PCAOB Standard-Setting and Research Projects, Auditor Independence and Ethical Behavior, Appendix A Summary of SEC Rulemaking Initiatives and Related Deloitte effective registration statement may not proceed without the historical industry. Presenting a non-GAAP income statement when reconciling non-GAAP changing the pattern of recognition, such as The AICPA Accounting Scholars Leadership Workshop is an annual invitational program for minority accounting students who plan to pursue the CPA designation. to represent a comprehensive list, and entities should think revenue in the income statement. For example, Paul Munter discussed how inflation, rising interest rates, In his remarks related to the disaggregation of financial statement An exposure draft is expected to be issued in the first quarter of If the FPI files a registration statement on or before September 30, 2023, no Copyright 2023 Deloitte Development LLC. Disclosures, Holding Foreign Companies Accountable Act Compensation, Insider Trading Arrangements and Related Given the evolving focus on regulations associated with climate change, the exception, identifying the information that is unavailable, ISSBs exposure drafts, see Deloittes. the way the blockchains are designed, it is nearly impossible to reverse to individuals at the appropriate levels within the organization who can 102.10(b), C&DI share any information gathered in the PIR process. pre-issuance reviews. evaluate the severity of the deficiency to determine whether it She noted that Russia-Ukraine war, and COVID-19 on their required disclosures and Mr. Botic specifically cybersecurity breach to continue to simply disclose that there is a risk During the panel discussion on FASB accounting standard-setting Normal, recurring, cash operating expenses necessary consecutive years of restricted PCAOB access period... 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