Quarterly Accounting Update – Q1 2017

April 3, 2017

Welcome to the First Quarter issue of our Quarterly Accounting Update. Each quarter, we provide you with up-to-date information for consideration in your financial reporting and disclosures. Our goal is for you to have current, relevant information available prior to finalizing your financial reporting deliverables. This update is organized as follows:

Selected Highlights
This section includes an executive summary of selected items and hot topics covered in this update.

FASB Updates

This section includes an overview of selected Accounting Standards Updates (ASUs) issued during the period.

Regulatory Updates

This section includes an overview of selected updates, releases, rules and actions during the period that might impact financial information, operations and/or governance.

Other Developments

This section includes an overview of other developments, actions and projects of the FASB, PCC, EITF and/or other rulemaking organizations.

On the Horizon

This section includes an overview of selected projects and exposure drafts of the FASB.

Appendices

  • A – Important Implementation Dates
  • B – Illustrative Disclosures for Recently Issued Accounting Pronouncements

Quarterly Accounting Update: Selected Highlights

FASB Simplifies Goodwill Impairment Test

In January, the FASB removed Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value.

Find out more about this new standard in the FASB Update section.

Efforts to Roll-Back Obama-Era Regulations

The Financial CHOICE Act would allow companies to raise as much as $75 million under Regulation A offerings, expand the JOBS Act’s confidential filing provisions for initial public offerings (IPO) to all companies seeking to register their shares for the first time, and exempt a broad swath of small-cap companies from the auditor attestation requirements in Section 404(b) of the Sarbanes-Oxley Act of 2002.

Read more about these issues in the Regulatory Update section.

Private Companies May Get Relief from Common Control VIE Guidance

The FASB has agreed to consider exempting private companies from following the variable interest entity (VIE) guidance for businesses under common control in ASC 810, Consolidation.

More information on this proposal can be found in the Other Developments section.

Quarterly Accounting Update: FASB Update

The following selected Accounting Standards Updates (ASUs) were issued by the Financial Accounting Standards Board (FASB) during the first quarter. A complete list of all ASUs issued or effective in 2017 is included in Appendix A.

FASB Clarifies Definition of a Business

Affects: All entities

On January 5, 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, with the objective of adding guidance to assist companies and other reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. An entity uses the definition of a business in determining whether to account for a transaction as an asset acquisition or a business combination. This distinction is important because the accounting for an asset acquisition significantly differs in certain respects from the accounting for a business combination. For example, the acquirer’s transaction costs are capitalized in an asset acquisition but are expensed in a business combination. Another difference is that in a business combination, the assets acquired are recognized at fair value and goodwill is recognized; in an asset acquisition, however, the cost of the acquisition is allocated to the assets acquired on a relative fair value basis and no goodwill is recognized. The amendments are expected to result in fewer acquired sets of assets (and liabilities) to be identified as businesses.

Under current U.S. generally accepted accounting principles (GAAP), there are three elements of a business—inputs, processes and outputs. While an integrated set of assets and activities (collectively referred to as a “set”) that is a business usually has outputs, outputs are not required to be present. In addition, all the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs, for example, by integrating the acquired set with their own inputs and processes.

The amendments in this ASU provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated.

If the screen is not met, the amendments (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, outputs generally are a key element of a business.

Effective Dates

For public companies, the amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. All other companies and organizations should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments should be applied prospectively on or after the effective date. No disclosures are required at transition.

Early application of the amendments is allowed as follows:

  • For transactions for which the acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance
  • For transactions in which a subsidiary is deconsolidated or a group of assets is derecognized that occur before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance.

FASB Simplifies Goodwill Impairment Test

Affects: All entities

On January 26, 2017, the FASB issued guidance to simplify the accounting related to goodwill impairment. ASU 2017-04, Simplifying the Test for Goodwill Impairment, removes Step 2 of the current goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value. All other goodwill impairment guidance will remain largely unchanged and entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary.

Under current U.S. GAAP, impairment of goodwill is defined as the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The process of measuring the implied fair value of goodwill is currently referred to as Step 2 of the goodwill impairment test. To perform Step 2, an entity must assign the fair value of a reporting unit to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. Accordingly, performing Step 2 can sometimes result in significant cost and complexity since the fair value of goodwill can be measured only as a residual and cannot be measured directly.

Goodwill impairment will now be measured on the basis of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit.

The ASU does not eliminate the qualitative assessment; however, it removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Therefore, the goodwill of reporting units with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit indicate that goodwill is impaired. Entities will, however, be required to disclose any reporting units with zero or negative carrying amounts and the respective amounts of goodwill allocated to those reporting units.

Effective Dates

For public business entities that are SEC filers, ASU 2017-04 is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Public business entities that are not SEC filers should apply the new guidance to annual and any interim impairment tests for periods beginning after December 15, 2020. For all other entities, the new guidance is effective for annual and any interim impairment tests for periods beginning after December 15, 2021. Early adoption is allowed for all entities as of January 1, 2017, for annual and any interim impairment tests with measurement dates after January 1, 2017.

Private companies that switch from the PCC accounting alternative should apply the guidance in ASU 2017-04 prospectively on or before its effective date. Private companies that switch from the PCC accounting alternative to the ASU’s guidance on or before the effective date would not need to justify preference for the accounting change.

FASB Clarifies Part of New Revenue Recognition Guidance

Affects: All entities

On February 22, 2017, the FASB issued ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, to clarify the scope of established guidance on nonfinancial asset derecognition (issued as part of the new revenue standard, ASU 2014-09, Revenue from Contracts with Customers), as well as the accounting for partial sales of nonfinancial assets.

While the revenue standard primarily focuses on contracts with customers, it does include guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with non-customers. ASU 2017-05 clarifies when and how to apply that guidance, in certain situations. The new guidance:

  • Defines “in substance nonfinancial asset”
  • Unifies guidance related to partial sales of nonfinancial assets
  • Eliminates rules specifically addressing sales of real estate
  • Removes exceptions to the financial asset derecognition model
  • Clarifies the accounting for contributions of nonfinancial assets to joint ventures

Effective Dates

The effective date and transition requirements for the amendments in ASU 2017-05 are aligned with the requirements in the new revenue standard, which is effective for public companies for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017, and for nonpublic companies for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019.

FASB Amends Presentation of Benefit Plan Cost for Employers

Affects: All entities that offer defined benefit pension plans, other postretirement benefit plans or other types of benefits accounted for under ASC 715

On March 10, 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments apply to all employers, including not-for-profit entities, that offer to their employees defined benefit pension plans, other postretirement benefit plans or other types of benefits accounted for under ASC 715, Compensation—Retirement Benefits. Specifically, ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed.

Effective Dates

The amendments are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For other entities, the amendments are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance.

Quarterly Accounting Update: Regulatory Update

SEC Issues Rule Requiring Hyperlinks to Exhibits in Regulatory Filings

On March 1, 2017, the Securities and Exchange Commission (SEC) published Release No. 33-10322, Exhibit Hyperlinks and HTML Format, which requires public companies to include hyperlinks to the exhibits in the indexes of their regulatory filings. The SEC said the hyperlinks will make finding old exhibits in its Electronic Data Gathering, Analysis, and Retrieval System (EDGAR) filing system easier because investors will not have to search through previous filings to find and review an exhibit.

Specifically, the hyperlinks have to be incorporated into registration statements and quarterly and annual reports submitted through the EDGAR filing system and formatted in the HyperText Markup Language (HTML). Companies will not be able to submit their filings using the American Standard Code for Information Interchange (ASCII) text format because it does not support hyperlinks.

The requirements will become effective on September 1, 2017. However, companies classified as nonaccelerated filers by Rule 12b-2 of the Securities Exchange Act of 1934, which means the value of the shares trading publicly is less than $75 million, and companies defined as smaller reporting companies in Rule 405 of the Securities Act of 1933 will not have to meet the requirements until September 1, 2018.

States May Be Cut Out of Regulation A Trading Market

On February 15, 2017, the SEC’s Advisory Committee on Small and Emerging Companies, which advises the commission on matters relevant to private companies and public companies with less than $250 million in market value, debated whether to cut state regulators out of secondary trading in shares issued under Regulation A. Critics say the presence of state regulators in the resale process is impeding efforts to raise capital via the Jumpstart Our Business Startups (JOBS) Act reforms.

The SEC recently overhauled the exemption under the Securities Act of 1933, which had previously allowed companies to raise up to $5 million per year in unregistered offerings, as long as they complied with securities regulations in the states where the offering took place. Release No. 33-9741, Amendments to Regulation A, instead, gave companies two paths to raising capital under the exemption. Tier one offerings of up to $20 million are still subject to state review, while tier two offerings of up to $50 million are exempt from state regulation but carry tougher federal filing requirements. State preemption was the centerpiece of the Regulation A reforms, with advocates pointing to a faster, less expensive process for using the exemption. But investors reselling tier two Regulation A securities have no such benefit; secondary transactions remain within the purview of state securities regulators. Some panelists at the meeting favored extending state preemption to resales under Regulation A, while others favored streamlining the state-level reviews.

Updated Financial CHOICE Act Would Expand Regulation A Limits, Confidential Filings and SOX 404(b) Exemptions

House Financial Services Committee Chairman, Jeb Hensarling, has introduced the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepeneurs) Act. The bill would undo much of the Dodd-Frank Act, place new checks on regulators and ease or abolish many other financial industry rules. One provision in the bill would allow companies to raise as much as $75 million under Regulation A offerings. The provision, part of Hensarling’s updated Financial Choice Act, would expand earlier reforms to the exemption under the JOBS Act. Today, privately held companies can conduct mini-IPOs of much as $50 million through unregistered Regulation A offerings. Before the SEC amended Regulation A in 2015, offerings were limited to $5 million and were subject to blue sky review by state securities regulators.

The effort to roll-back Obama-era regulations would also expand the JOBS Act’s confidential filing provisions for initial public offerings (IPO) to all companies seeking to register their shares for the first time. Today, under Title I of the JOBS Act, an issuer that qualifies as an emerging growth company (EGC) can file a confidential draft registration statement with the SEC, allowing for a closed-door period of review before the documents are made available to the public. The company must make its filing public at least 15 days before it embarks on its IPO road show. The 2012 law defines an EGC as a company with less than $1 billion in annual revenue. A company ceases to be an EGC when it surpasses that threshold or reaches the last day of the fiscal year containing the fifth anniversary of its IPO date, among other criteria. Under the proposal, confidential filings will apply to all companies registering shares for the first time with the SEC.

The Financial CHOICE Act would also exempt a broad swath of small-cap companies from the auditor attestation requirements in Section 404(b) of the Sarbanes-Oxley Act of 2002. The auditor attestation requirement is widely seen as one of the most expensive corporate accounting reforms in the 2002 law, mandating that an outside auditor review and report on management’s assessment of internal controls over financial reporting (ICFR). Today, exemptions to Section 404(b) are governed by a company’s public float. Nonaccelerated filers, the companies with public floats of less than $75 million, are exempt from Section 404(b). In 2016, Hensarling proposed expanding the exemption to include companies with up to $250 million in market capitalization, as well as banks with up to $1 billion in assets. In a memo outlining updates to the bill for the current congress, Hensarling indicated he plans to double that proposed market cap threshold, to $500 million. Large corporations, stock exchanges and industry trade groups have voiced support for broadening the exemptions, while the audit profession and investor groups back keeping the current threshold.

House Approves Three Deregulatory Bills

In the first week of March, the House of Representatives approved three bills that would place new constraints on regulators and target existing rules for elimination. The three measures passed the GOP-controlled House by votes that largely tracked party lines and could face tougher opposition in the Senate, where Republican senators are likely to have their own visions for overhauling regulation and where Democrats still have enough seats to mount a filibuster. The bills are part of a broader anti-regulatory push by congressional Republicans and the Trump administration, and if they are enacted into law, they would greatly limit the authority of regulatory agencies like the SEC to issue new rules or amend existing regulations.

The measures include H.R. 1009, OIRA Insight, Reform, and Accountability Act, which would expand the powers of the White House Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) to review agency rules, including by broadening the purview of the office to include independent agencies, such as the SEC. Today, independent agency proposals are exempt from OIRA review.

The House also approved H.R. 998, Searching for and Cutting Regulations that are Unnecessarily Burdensome (SCRUB) Act, which would set up a Retrospective Regulatory Review Commission to search out rules for repeal. The commission would give priority to cutting regulations that have been in effect for more than 15 years, among other factors. The bill would also set up a system in which agencies must repeal old rules to offset the costs of new ones.

The third bill passed by the House, H.R. 1004, Regulatory Integrity Act of 2017, orders federal agencies to publicize information about pending regulatory actions on their websites or regulations.gov. Under the measure, agencies would also be barred from publicly advocating in support of proposed rules.

Quarterly Accounting Update: Other Developments

GASB Issues New Guidance on Fiduciary Activities

On January 31, 2017, the Governmental Accounting Standards Board (GASB) issued guidance for state and local governments regarding what constitutes fiduciary activities for financial reporting purposes, how fiduciary activities should be reported and when liabilities to beneficiaries should be recognized. Governments currently are required to report fiduciary activities in fiduciary fund financial statements. However, existing standards are not explicit about what constitutes a fiduciary activity for financial reporting purposes. To remedy the diversity in practice with regard to identifying and reporting fiduciary activities, GASB Statement 84, Fiduciary Activities, establishes criteria for identifying fiduciary activities of all state and local governments.

Key Points

The criteria in Statement 84 generally focus on:

  • Whether a government is controlling the assets of the fiduciary activity, and
  • The beneficiaries with whom a fiduciary relationship exists.

Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities.

An activity meeting the criteria in Statement 84 should be reported in a fiduciary fund in the basic financial statements. Governments with activities meeting the criteria should present a statement of fiduciary net position and a statement of changes in fiduciary net position. An exception to that requirement is provided for a business-type activity that normally expects to hold custodial assets for three months or less.

Statement 84 describes four types of fiduciary funds that should be reported, if applicable. The Statement clarifies the definitions of the three existing fiduciary funds associated with trusts that meet specific criteria:

  • Pension (and other employee benefit) trust funds
  • Investment trust funds
  • Private-purpose trust funds
  • Custodial funds.

Custodial funds generally should report fiduciary activities that are not held in a trust or equivalent arrangement that meets specific criteria.

A fiduciary component unit, when reported in the fiduciary fund financial statements of a primary government, should combine its information with its component units that are fiduciary component units and aggregate that combined information with the primary government’s fiduciary funds.

Statement 84 also provides for recognition of a liability to the beneficiaries in a fiduciary fund when an event has occurred that compels the government to disburse fiduciary resources. Events that compel a government to disburse fiduciary resources occur when a demand for the resources has been made or when no further action, approval or condition is required to be taken or met by the beneficiary to release the assets.

Effective Date and Transition

The requirements of Statement 84 are effective for reporting periods beginning after December 15, 2018. Earlier application is encouraged.

New GASB Guidance Impacts a Broad Range of Practice Issues

On March 20, 2017, the GASB issued guidance addressing several different accounting and financial reporting issues identified during the implementation and application of certain GASB pronouncements. GASB Statement 85, Omnibus 2017, addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and pensions and other postemployment benefits (OPEB).

The issues covered by Statement 85 include:

  • Blending a component unit in circumstances in which the primary government is a business-type activity reporting in a single column for financial statement presentation;
  • Reporting amounts previously reported as goodwill and “negative” goodwill;
  • Classifying real estate held by insurance entities;
  • Measuring certain money market investments and participating interest-earning investment contracts at amortized cost;
  • Timing of the measurement of pension and OPEB liabilities and related expenditures recognized in financial statements prepared using the current financial resources measurement focus;
  • Recognizing on-behalf payments for pensions or OPEB in employer financial statements; and
  • Simplifying certain aspects of the alternative measurement method for OPEB.

In addition, Statement 85 addresses issues similar to those covered in Statements 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, and Statement 82, Pension Issues.

Effective Date and Transition

The provisions of Statement 85 are effective for reporting periods beginning after June 15, 2017. Earlier application is encouraged.

FASB Clarifying Guidance about Some Types of Contributions

The FASB intends to clarify the guidance in ASC 958-605, Not-for-Profit Entities—Revenue Recognition, for conditional contributions to not-for-profit organizations. A condition on a contribution to a charity, school or other type of not-for-profit organization would have to entitle the donor to recover the funds if the condition is not met and require the organization to cross what the FASB called a barrier to qualify for the funds. But the FASB is still unsure about how to word the guidance for the rights to the funds retained by the donor, and they want to hear the feedback of the FASB’s Not-for-Profit Advisory Committee. FASB board members also struggled to come up with clear guidance that would establish what a not-for-profit organization needs to do to meet a donor’s requirements to keep the contribution and not return it. The FASB’s research staff produced a list of indicators that they believed not-for-profits would use as a reference to determine if a donor retained the rights to the funds. But board members were unsure about how to clearly word this for U.S. GAAP.

The FASB has a relatively limited amount of time to resolve the issue, given that the new revenue standard, ASU 2014-09, Revenue From Contracts With Customers, is scheduled to become effective in 2018. Because the amended revenue guidance is slated to supersede some requirements in Subtopic 958-605, not-for-profit organizations may face more complicated financial reporting questions for grants and contributions, and the FASB wants to clarify how to account for the transactions under the new revenue guidance.

Private Companies May Get Relief from Common Control VIE Guidance

The FASB has agreed to consider exempting private companies from following the variable interest entity (VIE) guidance for businesses under common control in ASC 810, Consolidation. Private companies have complained for years that the VIE guidance is overly complicated for privately held businesses trying to determine whether to consolidate affiliated entities with the same parent company. Many companies err on the side of consolidating multiple affiliated and subsidiary businesses onto a parent’s balance sheet—a practice that frustrates lenders and creditors who want to see cleaner balance sheets.

The FASB’s Private Company Council asked the FASB research staff to develop private company-oriented examples and illustrations to include in the consolidated reporting standard. But after the staff drew up a relatively straightforward example, staff members could not agree on how to apply the accounting requirements. The FASB staff said there are problems with the existing common control guidance and its reliance on an assessment of power. Whoever is in power is the parent entity and must report on its balance sheet its holdings. In certain private company transactions, such as those between friends or relatives, there are no formalized arrangements, the parent can change and there is little to no paperwork to back up decisions.

If approved, private companies would be permitted to elect to use the exemption and would be required to provide enhanced disclosures. The FASB plans to proceed with the changes in two separate proposals—one to cover private company concerns and another that makes broader structural changes to the VIE guidance.

Accounting for Changes in Tax Law

With Congress actively debating bills that affect tax law, it’s important to remember that ASC 740, Income Taxes, requires that the effects of a change in tax law or rates be recognized in the period that includes the enactment date. For U.S. federal tax purposes, the enactment date is most often the date the President signs the bill into law. The key concept is that the full legislative process is complete. Most states follow the same or similar processes.

In some instances, changes may be enacted after year-end but before the financial statements are issued. In those situations, also in accordance with ASC 740-10-45-15, the enacted change would not be recognized until the period that includes the enactment date. In addition, any valuation allowance for deferred tax assets should not take into consideration the impact of a decrease in tax rates. The intent of ASC 740 is that the impact of all tax rate or tax law changes be reflected in the period of enactment, regardless of the effect on deferred assets and liabilities in financial statements for earlier periods. Accordingly, the impact on the valuation allowance of a decrease in tax rates enacted after year-end but before the financial statements are issued, would not be recorded at year-end. However, when changes in tax laws or rates are enacted subsequent to year-end but before the financial statements are released, the effect on existing deferred tax assets or liabilities should be disclosed.

Quarterly Accounting Update: On the Horizon

The following selected FASB exposure drafts and projects are outstanding as of March 31, 2017.

Balance Sheet Classification of Debt

The purpose of this project is to reduce cost and complexity by replacing the fact-pattern specific guidance in U.S. GAAP with a principle to classify debt as current or noncurrent based on the contractual terms of a debt arrangement and an entity’s current compliance with debt covenants.

On January 10, 2017, the FASB issued a proposed ASU on determining whether debt should be classified as current or noncurrent in a classified balance sheet. In place of the current, fact-specific guidance in ASC 470-10, the proposed ASU would introduce a classification principle under which a debt arrangement would be classified as noncurrent if either (1) the “liability is contractually due to be settled more than one year (or operating cycle, if longer) after the balance sheet date” or (2) the “entity has a contractual right to defer settlement of the liability for at least one year (or operating cycle, if longer) after the balance sheet date.” Under an exception to the classification principle, an entity would not classify debt as current solely because of the occurrence of a debt covenant violation that gives the lender the right to demand repayment of the debt, as long as the lender waives its right before the financial statements are issued (or are available to be issued).

Expanded Inventory Disclosures Proposed

On January 10, 2017, the FASB issued a proposed ASU, Disclosure Framework—Changes to the Disclosure Requirements for Inventory, which calls on businesses to provide more detailed disclosures about their raw materials and finished goods.

The proposed ASU would require business to disclose their inventory by component, such as by raw materials, finished goods, supplies and works-in-process. Businesses also would have to break down how their inventory is measured. Businesses use a variety of measurement techniques for inventory, including last-in, first-out (LIFO), first-in, first-out (FIFO), LIFO retail inventory method, or weighted average.  Significant shrinkage, spoilage, damage or other unusual transactions or circumstances affecting inventory balances also would have to be disclosed.

Additionally, businesses would have to describe the types of costs capitalized into inventory, the effect of LIFO liquidations on income and the replacement cost of LIFO inventory.

The comment period for this proposed ASU closed on March 13.  The FASB is currently redeliberating the proposed ASU in light of the comments received.

Nonemployee Share-Based Payment Accounting Improvements

The purpose of this project is to reduce cost and complexity and improve the accounting for nonemployee share-based payment awards issued by public and private companies.

At its May 4, 2016, meeting, the FASB tentatively decided to expand the scope of ASC 718, Compensation—Stock Compensation, to include all share-based payment arrangements related to acquiring goods and services from nonemployees. At its June 15, 2016, meeting, the FASB made tentative decisions about transition methods for applying the proposed guidance and disclosures, and on November 30, 2016, tentatively decided to require the use of the contractual term (rather than the expected term) as an input for measuring nonemployee share-based payment transactions. The FASB expects to issue the proposed ASU in 2017.

Financial Instruments – Hedging Activities

The FASB’s financial instruments project has three primary areas which are being individually addressed: (1) recognition and measurement, (2), impairment and (3) hedging. On January 5, 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, to address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. On June 16, 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. This standard introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale (AFS) debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination.

The final part of the project, related to hedge accounting, was exposed for public comment in September, 2016. Many companies use derivative financial instruments to hedge their exposure to certain risks. Today, hedge accounting is an elective approach that minimizes the accounting volatility created when derivatives, which are otherwise accounted for at fair value through net income, are used to hedge revenue or expenses that are not yet reported (e.g., forecasted sales or purchases) or to hedge assets or liabilities that are not measured at fair value through net income (e.g., inventory or debt). Qualifying criteria must be met in order to apply hedge accounting. The proposed ASU, Targeted Improvements to Accounting for Hedging Activities, contains proposals for improving how the economic results of an entity’s risk management activities are portrayed by:

  • Expanding the use of component hedging for both nonfinancial and financial risks
  • Refining the measurement techniques for hedged items in fair value hedges of benchmark interest rate risk
  • Eliminating the separate measurement and reporting of hedge ineffectiveness
  • Requiring for cash flow and net investment hedges that all changes in fair value of the hedging instrument included in the hedging relationship be deferred in other comprehensive income and released to the income statement in the period(s) when the hedged item affects earnings
  • Requiring that changes in the fair value of hedging instruments be recorded in the same income statement line item as the earnings effect of the hedged item
  • Requiring enhanced disclosures to highlight the effect of hedge accounting on individual income statement line items

In addition, the proposal simplifies the application of hedge accounting by:

  • Providing more time for the completion of initial quantitative assessments of hedge effectiveness
  • Allowing subsequent assessments of hedge effectiveness to be performed on a qualitative basis when an initial quantitative test is required
  • Clarifying the application of the critical terms match method for a group of forecasted transactions
  • Allowing an entity that elects the shortcut method to continue hedge accounting by using a “long-haul” method to assess hedge effectiveness if use of the shortcut method was not or no longer is appropriate after hedge inception

The FASB will determine an effective date for the ASU after redeliberating all comments received during the comment period and from the public round table meetings. Early application of the proposed amendments would be permitted at the beginning of any fiscal year before the effective date.

Disclosure Framework

The disclosure framework project consists of two phases: (1) the FASB’s decision process and (2) the entity’s decision process. The overall objective of the project is to improve the effectiveness of disclosures in notes to financial statements by clearly communicating the information that is most important to users of each entity’s financial statements. Although reducing the volume of the notes to financial statements is not the primary focus, the FASB hopes that a sharper focus on important information will result in reduced volume in most cases.

In March 2014, the FASB issued an Exposure Draft, Conceptual Framework for Financial Reporting: Chapter 8 Notes to Financial Statements, intended to improve its process for evaluating existing and future disclosure requirements in notes to financial statements. Specifically, it addresses the FASB’s process for identifying relevant information and the limits on information that should be included in notes to financial statements. If approved, it would become part of the FASB’s Conceptual Framework, which provides the foundation for making standard-setting decisions.

In September 2015, the FASB issued two proposals—one about the use of materiality by reporting entities, Assessing Whether Disclosures Are Material, and the other amending the Conceptual Framework’s definition of materiality, Conceptual Framework for Financial Reporting Chapter 3: Qualitative Characteristics of Useful Financial Information. These two proposals were issued to help entities decide what information should be included in their footnotes without bogging them down with extra details.

The main provisions would draw attention to the role materiality plays in making decisions about disclosures. More specifically, the proposed ASU explains that: (a) materiality would be applied to quantitative and qualitative disclosures individually and in the aggregate in the context of the financial statements as a whole; therefore, some, all or none of the requirements in a disclosure Section may be material; (b) materiality would be identified as a legal concept; and (c) omitting a disclosure of immaterial information would not be an accounting error.

Accounting for Interest Income Associated with the Purchase of Callable Debt Securities

This project aims to enhance the transparency and usefulness of the information provided in the notes to the financial statements about interest income on purchased debt securities and loans and will also consider targeted improvements regarding the accounting for the amortization of premiums for purchased callable debt securities.

On September 22, 2016, the FASB issued a proposed ASU that would shorten the amortization period for investments in callable debt securities purchased at a premium by requiring that the premium be amortized to the earliest call date.

On February 1, 2017, the FASB discussed feedback received on the proposed ASU and directed the staff to draft a final ASU for a vote by written ballot. The final ASU is expected to be issued in the second quarter of 2017. For public business entities, the ASU will be effective for fiscal years, and interim periods within those fiscal years, starting after December 15, 2018. For all other entities, it will be effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. All entities will be permitted to early adopt the guidance.

EITF Agenda Items

At its March 2017 meeting, the FASB’s Emerging Issues Task Force (EITF) reached a final consensus on the accounting for service concession arrangements.

Final Consensus

Issue 16-C: Determining the Customer of the Operation Services in a Service Concession Arrangement— The EITF reached a final consensus intended to resolve diversity in practice related to the accounting for service concession arrangements. A service concession arrangement is an arrangement between a grantor (a government or public-sector entity) and an operating entity (a private-sector entity) under which the operating entity will operate the grantor’s infrastructure (e.g., airports, roads, bridges and hospitals). Under the proposed ASU, the grantor (rather than any third-party user) is considered the customer of the operation services when the revenue recognition guidance in ASC 606, Revenue From Contracts With Customers, is applied to a service concession arrangement within the scope of ASC 853, Service Concession Arrangements. Accordingly, payments made by the operating entity to the grantor are treated as a reduction of revenue rather than as an operating expense. If ratified by the FASB, the guidance will have the same effective date as the effective date and transition requirements for ASC 606.

PCC Activities

There are no Private Company Council (PCC) developments or updates as the PCC held no meetings during the first quarter of 2017.

APPENDIX A

Important Implementation Dates

The following table contains significant implementation dates and deadlines for FASB/EITF/PCC and GASB standards.

FASB/EITF/PCC Implementation Dates

Pronouncement Affects Effective Date and Transition
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities Entities that hold investments in callable debt securities held at a premium Effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after  December  15,  2019,  and  interim  periods  within  fiscal  years  beginning  after December 15, 2020. Early adoption is permitted, including adoption in an interim period.
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost Entities that offer defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under ASC 715. Effective for public business entities for interim and annual periods beginning after December 15, 2017. For other entities, the amendments are effective for annual periods beginning after December 15, 2018, and interim periods in the subsequent annual period. Early adoption is permitted as of the beginning of any annual period for which an entity’s financial statements have not been issued or made available for issuance.
ASU 2017-06, Employee Benefit Plan Master Trust Reporting—a consensus of the Emerging Issues Task Force                                         Entities within the scope of ASC 960, ASC 962, or ASC 965. Effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. An entity should apply the amendments retrospectively to each period for which financial statements are presented.
ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets All entities. See the Effective Date and Transition of ASU 2014-09, below.
ASU 2017-04, Simplifying the Test for Goodwill Impairment All entities. Effective for public business entities that are SEC filers for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. For public business entities that are not SEC filers, the amendments are effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2020. For all other entities, including not-for-profit entities, the amendments are effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2021. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.
ASU 2017-03, Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings  All entities. Effective upon issuance.
ASU 2017-02, Clarifying When a Not-for-Profit Entity That Is a General Partner or a Limited Partner Should Consolidate a For-Profit Limited Partnership or Similar Entity Not-for-profit entities. Effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period.
ASU 2017-01, Clarifying the Definition of a Business All entities. Effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.
ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers All entities. See the Effective Date and Transition of ASU 2014-09, below.
ASU 2016-19, Technical Corrections and Improvements All entities. Effective upon issuance (December 14, 2016) for amendments that do not have transition guidance. Amendments that are subject to transition guidance: effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted.
ASU 2016-18, Restricted Cash (a consensus of the FASB Emerging Issues Task Force) All entities. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

The amendments should be applied using a retrospective transition method to each period presented.

ASU 2016-17, Interests Held through Related Parties That Are under Common Control All entities. The amendments are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

Entities that have not yet adopted the amendments in ASU 2015-02 are required to adopt the amendments at the same time they adopt the amendments in ASU 2015-02 and should apply the same transition method elected for the application of ASU 2015-02.

Entities that already have adopted the amendments in ASU 2015-02 are required to apply the amendments retrospectively to all relevant prior periods beginning with the fiscal year in which the amendments in ASU 2015-02 initially were applied.

ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory All entities. For public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. For all other entities, the amendments are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual periods beginning after December 15, 2019. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. That is, earlier adoption should be in the first interim period if an entity issues interim financial statements.

The amendments should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.

ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) All entities. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period.

The amendments should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable.

ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities All not-for-profit entities. The amendments are effective for annual financial statements issued for fiscal years beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018. Application to interim financial statements is permitted but not required in the initial year of application. Early application of the amendments is permitted.
ASU 2016-13, Measurement of Credit Losses on Financial Instruments All entities that hold financial assets and net investment in leases that are not accounted for at fair value through net income. For public business entities (PBE) that are Securities and Exchange Commission (SEC) filers, the new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (for a calendar-year entity, it would be effective January 1, 2020).

For PBEs that are not SEC filers, the new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

For all other organizations, the new standard is effective for fiscal years beginning after December 15, 2020, and for interim periods within fiscal years beginning after December 15, 2021.

Early application will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.

ASU 2016-12, Narrow-Scope Improvements and Practical Expedients All entities See the Effective Date and Transition of ASU 2014-09, below.
ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update) None. None.
ASU 2016-10, Identifying Performance Obligations and Licensing All entities See the Effective Date and Transition of ASU 2014-09, below.
ASU 2016-09, Improvements to Employee Share-Based Payment Accounting All entities that issue share-based payment awards to their employees. For public business entities, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods.

For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018.

Early adoption is permitted for any organization in any interim or annual period.

ASU 2016-08, Principal versus Agent Considerations

(Reporting Revenue Gross versus Net)

All entities. See the Effective Date and Transition of ASU 2014-09, below.
ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting Entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted.
ASU 2016-06, Contingent Put and Call Options in Debt Instruments (a consensus of the Emerging Issues Task Force) Entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. For public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years.

For entities other than public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018.

An entity should apply the amendments on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year for which the amendments are effective.

Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (a consensus of the Emerging Issues Task Force) Entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument. For public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years.

For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018.

An entity has an option to apply the amendments on either a prospective basis or a modified retrospective basis.

Early adoption is permitted, including adoption in an interim period.

ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the Emerging Issues Task Force) Entities that offer certain prepaid stored-value products. For public business entities, NFPs that have issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an OTC market, or an employee benefit plan that files financial statements with the SEC, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.

The amendments should be applied either using a modified retrospective transition method by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective or retrospectively to each period presented.

Earlier application is permitted, including adoption in an interim period.

ASU 2016-03, Effective Date and Transition Guidance (a consensus of the Private Company Council) All entities except public business entities, as defined in the Master Glossary of the FASB Accounting Standards Codification, not-for-profit entities, and employee benefit plans. The amendments are effective immediately.
ASU 2016-02, Leases All lessee and lessor entities. For public business entities, NFPs that have issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an OTC market, or an employee benefit plan that files financial statements with the SEC, the amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

Early application of the amendments is permitted for all entities.

ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities Entities that hold financial assets or owe financial liabilities. For public companies the amendments are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.

For private companies, not-for-profit organizations, and employee benefit plans, the standard becomes effective for fiscal years beginning after December 15, 2018, and for interim periods within fiscal years beginning after December 15, 2019.

ASU 2015-17, Balance Sheet Classification of Deferred Taxes Entities that have deferred tax assets and/or deferred tax liabilities. For public business entities, the amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods.

For all other entities, the amendments are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018.

ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments Entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. All other entities are required to apply the new requirements for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017.

All entities are required to apply the amendments prospectively to adjustments to provisional amounts that occur after the effective date, with earlier application permitted for financial statements that have not been issued.

ASU 2015-14, Revenue From Contracts With Customers (ASC 606): Deferral of the Effective Date All entities. See the Effective Date and Transition of ASU 2014-09, below.
ASU 2015-11, Simplifying the Measurement of Inventory Entities that have inventory. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period.
ASU 2015-09, Disclosures about Short-Duration Contracts Insurance entities that issue short-duration contracts as defined in FASB ASC 944, Financial Services—Insurance. For public business entities, the amendments are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. For all other entities, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017.
ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement All entities. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities.
ASU 2015-04, Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets All entities. The amendments are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Earlier application is permitted.
ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs All entities. For public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued.
ASU 2015-02, Amendments to the Consolidation Analysis All entities. Effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

A reporting entity may apply the amendments using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. A reporting entity also may apply the amendments retrospectively.

ASU 2014-18, Accounting for Identifiable Intangible Assets in a Business Combination—a consensus of the Private Company Council All entities except public business entities, as defined in the Master Glossary of the FASB Accounting Standards Codification, not-for-profit entities, and employee benefit plans. Effective prospectively to the first in-scope transaction after the adoption of the accounting alternative.
ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity All entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of a share. Effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

Entities should apply the guidance on a modified retrospective basis (cumulative-effect retained earnings adjustment as of the beginning of the year of adoption) to existing hybrid instruments issued in the form of a share as of the beginning of the fiscal year for which this ASU is effective. Retrospective application is permitted to all relevant prior periods.

ASU 2014-15, Disclosure of Uncertainties About and an Entity’s Ability to Continue as a Going Concern All entities. Effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.
ASU 2014-13, Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity—a Consensus of the Emerging Issues Task Force A reporting entity that is required to consolidate a collateralized financing entity. Effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2015. For all other entities, the amendments are effective for annual periods ending after December 15, 2016, and interim periods beginning after December 15, 2016. Early adoption is permitted as of the beginning of an annual period.
ASU 2014-10, Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation All entities. Except for the amendments to ASC 810, the guidance is effective for public business entities for reporting periods (including interim periods) beginning after December 15, 2014. For other entities, the amendments are effective for annual periods beginning after December 15, 2014, and interim periods beginning after December 15, 2015. The amendments to ASC 810 are effective one year later for public business entities and two years later for other entities. The guidance should be applied retrospectively, except for the clarification to ASC 275, which applied prospectively.

Early adoption of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued.

ASU 2014-09, Revenue from Contracts with Customers All entities. For public business entities, certain not-for-profit entities, and certain employee benefit plans, the ASU is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early application is permitted only as of annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016.

For all other entities, the ASU is effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. All other entities may apply the ASU early as of an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance in the ASU early as of an annual reporting period beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance in the ASU.

An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying guidance at the date of initial application.

GASB Implementation Dates

Pronouncement Affects Effective Date and Transition
Statement 85, Omnibus 2017 Governmental entities. Effective for reporting periods beginning after June 15, 2017. Earlier application is encouraged.
Statement 84, Fiduciary Activities Governmental entities. Effective for reporting periods beginning after December 15, 2018. Earlier application is encouraged.
Statement 83, Certain Asset Retirement Obligations Governmental entities. Effective for reporting periods beginning after June 15, 2018. Earlier application is encouraged.
Statement 82, Pension Issues Governmental entities. Effective for reporting periods beginning after June 15, 2016, except for the requirements for the selection of assumptions in a circumstance in which an employer’s pension liability is measured as of a date other than the employer’s most recent fiscal year-end. In that circumstance, the requirements for the selection of assumptions are effective for that employer in the first reporting period in which the measurement date of the pension liability is on or after June 15, 2017. Earlier application is encouraged.
Statement 81, Irrevocable Split-Interest Agreements Governmental entities. Effective for financial statements for periods beginning after December 15, 2016, and should be applied retroactively. Earlier application is encouraged.
Statement 80, Blending Requirements for Certain Component Units—an amendment of GASB Statement No. 14 Governmental entities. Effective for reporting periods beginning after June 15, 2016. Earlier application is encouraged.
Statement 79, Certain External Investment Pools and Pool Participants Governmental entities. Effective for reporting periods beginning after June 15, 2015, except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing. Those provisions are effective for reporting periods beginning after December 15, 2015. Earlier application is encouraged.
Statement 78, Pensions Provided Through Certain Multiple-Employer Defined Benefit Pension Plans Governmental entities. Effective for reporting periods beginning after December 15, 2015. Earlier application is encouraged.
Statement 77, Tax Abatement Disclosures Governmental entities. Effective for reporting periods beginning after December 15, 2015. Earlier application is encouraged.
Statement 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments Governmental entities. Effective for reporting periods beginning after June 15, 2015. Earlier application is encouraged.
Statement 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions Governmental entities. Effective for fiscal years beginning after June 15, 2017. Early adoption is encouraged.
Statement 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans Governmental entities. Effective for financial statements for periods beginning after June 15, 2016. Early adoption is encouraged.
Statement 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68 Governmental entities. Effective for fiscal years beginning after June 15, 2015—except those provisions that address employers and governmental nonemployer contributing entities for pensions that are not within the scope of Statement 68, which are effective for financial statements for fiscal years beginning after June 15, 2016. Early adoption is encouraged.
Statement 72, Fair Value Measurement and Application Governmental entities. Effective for financial statements for periods beginning after June 15, 2015. Early adoption is encouraged.

APPENDIX B

Illustrative Disclosures for Recently Issued Accounting Pronouncements

For the Quarter Ended March 31, 2017

The illustrative disclosures below are presented in plain English.  Please review each disclosure for its applicability to your organization and the need for disclosure in your organization’s financial statements.

ASU 2014-09 ― Applicable to all:

In May 2014, the FASB issued guidance to change the recognition of revenue from contracts with customers. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. This guidance also includes expanded disclosure requirements that result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The guidance will be effective for the Company for [reporting periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] The Company will apply the guidance using a [full retrospective approach] [modified retrospective approach]. The Company is currently in the process of evaluating the impact of adoption of this guidance on the financial statements.

ASU 2014-10 ― Applicable to development stage entities:

In June 2014, the FASB issued guidance which eliminates the concept of a development stage entity. Accordingly, the incremental reporting requirements for a development stage entity, including inception-to-date information, will no longer apply.  The amendments were effective for the Company for [reporting periods beginning after December 15, 2014, except for certain consolidation requirements which are effective one year later-public business entities] [annual periods beginning after December 15, 2014, and interim periods beginning after December 15, 2015, except for certain consolidation requirements which are effective two years later-all other entities], with early implementation of the amendments permitted. The Company applied the guidance using a retrospective approach, except for certain disclosure requirements which will be applied prospectively. These amendments did not have a material effect on its financial statements.

ASU 2014-15 ― Applicable to all:

In August 2014, the FASB issued guidance that is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements, management will need to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the organization’s ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments will be effective for the Company for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2014-16 ― Applicable to companies with hybrid financial instruments:

In November 2014, the FASB issued guidance for determining whether embedded features need to be accounted for separately from their host shares. The new guidance requires companies to consider all terms and features, including the embedded feature(s) being evaluated for separate recognition, when determining whether a host contract is more akin to debt or equity; no single term or feature should be considered determinative regarding the nature of the host contract. The amendments will be effective for [fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015-public business entities] [fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016-all other entities], with early adoption, including adoption in an interim period, permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2014-18 ― Applicable to private companies that elect to not recognize certain intangible assets in a business combination:

In December 2014, the FASB amended the Business Combinations topic of the Accounting Standards Codification. Under the amended guidance, a nonpublic entity may elect to not recognize separately from goodwill (1) customer-related intangible assets that are not capable of being sold or licensed independently from the other assets of the business and (2) noncompetition agreements. This alternative generally will result in recognizing fewer intangible assets in a business combination and, correspondingly, more goodwill. The alternative is applied on a prospective basis. In addition, when this alternative is elected, the Company also is required to adopt the alternative accounting related to goodwill which requires that goodwill be amortized on a straight-line basis over a period of ten years or over a shorter period if the Company demonstrates that another useful life is more appropriate. The amendments will be effective for the Company upon the occurrence of the first transaction within the scope of this accounting alternative in fiscal years beginning after December 15, 2015, and the effective date of adoption depends on the timing of that first in-scope transaction. If the first in-scope transaction occurs in the first fiscal year beginning after December 15, 2015, the elective adoption will be effective for that fiscal year’s annual financial reporting and all interim and annual periods thereafter. If the first in-scope transaction occurs in fiscal 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 and subsequent interim and annual periods thereafter. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-02 ― Applicable to all:

In February 2015, the FASB issued guidance which amends the consolidation requirements and significantly changes the consolidation analysis required under U.S. GAAP. Although the amendments are expected to result in the deconsolidation of many entities, the Company will need to reevaluate all its previous consolidation conclusions. The amendments will be effective for [fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015-public business entities] [fiscal years beginning after December 15, 2016, and interim periods beginning after December 15, 2017-all other entities], with early adoption permitted (including during an interim period), provided that the guidance is applied as of the beginning of the annual period containing the adoption date. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-03 ― Applicable to entities with debt issuance costs:

In April 2015, the FASB issued guidance which changes the presentation of debt issuance costs. The amendments will be effective for [fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015-public business entities] [fiscal years beginning after December 15, 2015, and interim periods beginning after December 15, 2016-all other entities], with early adoption permitted for financial statements that have not been previously issued. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-04 ― Applicable to entities with defined benefit pension plans:

In April 2015, the FASB issued guidance which provides a practical expedient that permits the Company to measure defined benefit plan assets and obligations using the month-end that is closest to the Company’s fiscal year-end. The amendments will be effective for [fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015-public business entities] [fiscal years beginning after December 15, 2016, and interim periods beginning after December 15, 2017-all other entities], with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-05 ― Applicable to entities with cloud computing arrangements:

In April 2015, the FASB issued guidance which provides guidance to customers about whether a cloud computing arrangement includes a software license. The amendments will be effective for [fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015-public business entities] [fiscal years beginning after December 15, 2015, and interim periods beginning after December 15, 2016-all other entities], with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-09 ― Applicable to insurance entities that issue short-duration contracts:

In May 2015, the FASB issued guidance which requires insurance entities to disclose for annual reporting periods certain information about the liability for unpaid claims and claim adjustment expenses. The amendments will be effective for [fiscal years beginning after December 15, 2015 and interim periods beginning after December 15, 2016-public business entities] [fiscal years beginning after December 15, 2016, and interim periods beginning after December 15, 2017-all other entities], with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-11 ― Applicable to entities that have inventory:

In July 2015, the FASB issued amendments to the Inventory topic of the Accounting Standards Codification to require inventory other than inventory measured at LIFO or retail methods to be measured at the lower of cost and net realizable value. Other than the change in the subsequent measurement guidance from the lower of cost or market to the lower of cost and net realizable value for inventory, there are no other substantive changes to the guidance on measurement of inventory. The amendments will be effective for [fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016-public business entities] [fiscal years beginning after December 15, 2016, and interim periods beginning after December 15, 2017-all other entities], with early adoption permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-14 ― Applicable to all:

In August 2015, the FASB deferred the effective date of ASU 2014-09, Revenue from Contracts with Customers. As a result of the deferral, the guidance in ASU 2014-09 will be effective for the Company for [reporting periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] The Company will apply the guidance using a [full retrospective approach] [modified retrospective approach]. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-16 ― Applicable to all entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete:

In September 2015, the FASB amended the Business Combinations topic of the Accounting Standards Codification to simplify the accounting for adjustments made to provisional amounts recognized in a business combination by eliminating the requirement to retrospectively account for those adjustments. The amendments will be effective for [fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015-public business entities] [fiscal years beginning after December 15, 2016, and interim periods beginning after December 15, 2017-all other entities], with early adoption permitted for financial statements that have not been issued. All entities are required to apply the amendments prospectively to adjustments to provisional amounts that occur after the effective date.  The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2015-17 ― Applicable to entities that have deferred tax assets and/or deferred tax liabilities:

In November 2015, the FASB amended the Income Taxes topic of the Accounting Standards Codification to simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments will be effective for [financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods-public business entities] [financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018-all other entities], with early adoption permitted as of the beginning of an interim or annual reporting period. The Company will apply the guidance [prospectively] [retrospectively].  The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-01 ― Applicable to entities that hold financial assets or owe financial liabilities:

In January 2016, the FASB amended the Financial Instruments topic of the Accounting Standards Codification to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments will be effective for [fiscal years beginning after December 15, 2017, includ­ing interim periods within those fiscal years.-public business entities] [fis­cal years beginning after Decem­ber 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.-all other entities, including not-for-profit or­ganizations and employee benefit plans] The Company will apply the guidance by means of a cu­mulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily deter­minable fair values will be applied prospectively to equity in­vestments that exist as of the date of adoption of the amendments.  The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-02 ― Applicable to lessee and lessor entities:

In February 2016, the FASB amended the Leases topic of the Accounting Standards Codification to require all leases with lease terms over 12 months to be capitalized as a right-of-use asset and lease liability on the balance sheet at the date of lease commencement. Leases will be classified as either finance leases or operating leases. This distinction will be relevant for the pattern of expense recognition in the income statement. The amendments will be effective for [fiscal years beginning after December 15, 2018, includ­ing interim periods within those fiscal years.-public business entities] [fis­cal years beginning after Decem­ber 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.-all other entities] Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this guidance on the financial statements.

ASU 2016-03 ― Applicable to private companies:

In March 2016, the FASB amended several topics of the Accounting Standards Codification to make the guidance in all private company accounting alternatives effective immediately by removing their effective dates. The amendments also include transition provisions that provide that private companies are able to forgo a preferability assessment the first time they elect the private company accounting alternatives. The amendments were effective immediately.  The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-04 ― Applicable to entities that offer certain prepaid stored-value products:

In March 2016, the FASB amended the Liabilities topic of the Accounting Standards Codification to address the current and potential future diversity in practice related to the derecognition of a prepaid stored-value product liability. The amendments will be effective for [financial statements issued for fiscal years beginning after December 15, 2017, includ­ing interim periods within those fiscal years.-public business entities] [financial statements issued for fis­cal years beginning after Decem­ber 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.-all other entities] Early adoption is permitted. The Company will apply the guidance [using a modified retrospective transition method by means of a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the guidance is effective] [retrospectively] to each period presented.  The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-05 ― Applicable to entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument:

In March 2016, the FASB amended the Derivatives and Hedging topic of the Accounting Standards Codification to clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amendments will be effective for [financial statements issued for fiscal years beginning after December 15, 2016, includ­ing interim periods within those fiscal years.-public companies] [financial statements issued for fis­cal years beginning after Decem­ber 15, 2017, and interim periods within fiscal years beginning after December 15, 2018.-all other entities] Early adoption is permitted. The Company will apply the guidance [using a modified retrospective transition] [prospectively] to each period presented.  The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-06 ― Applicable to entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options:

In March 2016, the FASB amended the Derivatives and Hedging topic of the Accounting Standards Codification to clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. The amendments will be effective for [financial statements issued for fiscal years beginning after December 15, 2016, includ­ing interim periods within those fiscal years.-public business entities] [financial statements issued for fis­cal years beginning after Decem­ber 15, 2017, and interim periods within fiscal years beginning after December 15, 2018.-all other entities] Early adoption is permitted. The Company will apply the guidance using a modified retrospective transition to existing debt instruments as of the beginning of the fiscal year for which the amendments are effective.  The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-07 ― Applicable to entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence:

In March 2016, the FASB amended the Investments—Equity Method and Joint Ventures topic of the Accounting Standards Codification to eliminate the requirement to retroactively adopt the equity method of accounting. The amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company will apply the guidance prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method.  The Company does not expect these amendments to have a material effect on its financial statements

ASU 2016-08 ― Applicable to all:

In March 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The amendments will be effective for the Company for [reporting periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-09 ― Applicable to all:

In March 2016, the FASB issued guidance to simplify several aspects of the accounting for share-based payment award transactions including the income tax consequences, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows.  Additionally, the guidance simplifies two areas specific to entities other than public business entities allowing them apply a practical expedient to estimate the expected term for all awards with performance or service conditions that have certain characteristics and also allowing them to make a one-time election to switch from measuring all liability-classified awards at fair value to measuring them at intrinsic value.  The amendments will be effective for the Company for [annual periods beginning after December 15, 2016 and interim periods within those annual periods.-public business entities] [annual periods beginning after December 15, 2017, and interim periods within annual reporting periods beginning after December 15, 2018.-all other entities] Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-10 ― Applicable to all:

In April 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to identifying performance obligations and accounting for licenses of intellectual property. The amendments will be effective for the Company for [reporting periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-12 ― Applicable to all:

In May 2016, the FASB amended the Revenue from Contracts with Customers topic of the Accounting Standards Codification to clarify guidance related to collectability, noncash consideration, presentation of sales tax, and transition. The amendments will be effective for the Company for [reporting periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-13 ― Applicable to entities that hold financial assets and net investment in leases that are not accounted for at fair value through net income:

In June 2016, the FASB issued guidance to change the accounting for credit losses and modify the impairment model for certain debt securities. The guidance requires a financial asset (including trade receivables) measured at amortized cost basis to be presented at the net amount expected to be collected. Thus, the income statement will reflect the measurement of credit losses for newly-recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. The amendments will be effective for the Company for [reporting periods beginning after December 15, 2019.-SEC filers] [reporting periods beginning after December 15, 2020.-public business entities that are not SEC filers] [annual periods beginning after December 15, 2020, and interim periods within annual reporting periods beginning after December 15, 2021.-all other entities] Early adoption is permitted for all organizations for periods beginning after December 15, 2018. The Company is currently in the process of evaluating the impact of adoption of this guidance on the financial statements.

ASU 2016-14 ― Applicable to all not-for-profit entities:

In August 2016, the FASB issued guidance to make targeted improvements to the not-for-profit financial reporting model, including changes in how a not-for-profit organization classifies its net assets, as well as the information it presents in financial statements and notes about its liquidity, financial performance, and cash flows. The amendments will be effective for the Organization for fiscal years beginning after December 15, 2017 and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. The Organization is currently evaluating the effect that implementation of the new standard will have on its financial statements.

ASU 2016-15 ― Applicable to all:

In August 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments will be effective for the Company for [fiscal years beginning after December 15, 2017 including interim periods within those fiscal years.-public business entities] [fiscal years beginning after Decem­ber 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.-all other entities] Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-16 ― Applicable to all:

In October 2016, the FASB amended the Income Taxes topic of the Accounting Standards Codification to modify the accounting for intra-entity transfers of assets other than inventory. The amendments will be effective for the Company for [fiscal years beginning after December 15, 2017 including interim periods within those fiscal years.-public business entities] [fis­cal years beginning after Decem­ber 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.-all other entities] Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-17 ― Applicable to all:

In October 2016, the FASB amended the Consolidation topic of the Accounting Standards Codification to revise the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The amendments will be effective for the Company for [fiscal years beginning after December 15, 2016 including interim periods within those fiscal years.-public business entities] [fiscal years beginning after Decem­ber 15, 2016, and interim periods within fiscal years beginning after December 15, 2017.-all other entities] Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-18 ― Applicable to all:

In November 2016, the FASB amended the Statement of Cash Flows topic of the Accounting Standards Codification to clarify how restricted cash is presented and classified in the statement of cash flows. The amendments will be effective for the Company for [fiscal years beginning after December 15, 2017 including interim periods within those fiscal years.-public business entities] [fis­cal years beginning after Decem­ber 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.-all other entities] Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-19 ― Applicable to all:

In December 2016, the FASB issued amendments to clarify the Accounting Standards Codification, correct unintended application of guidance, and make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments were effective upon issuance (December 14, 2016) for amendments that do not have transition guidance. Amendments that are subject to transition guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2016-20 ― Applicable to all:

In December 2016, the FASB issued technical corrections and improvements to the Revenue from Contracts with Customers Topic.  These corrections make a limited number of revisions to several pieces of the revenue recognition standard issued in 2014.  The effective date and transition requirements for the technical corrections will be effective for the Company for [reporting periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] The Company will apply the guidance using a [full retrospective approach] [modified retrospective approach]. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2017-01 ― Applicable to all:

In January 2017, the FASB issued guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendment to the Business Combinations Topic is intended to address concerns that the existing definition of a business has been applied too broadly and has resulted in many transactions being recorded as business acquisitions that in substance are more akin to asset acquisitions. The guidance will be effective for the Company for [reporting periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2017-02 ― Applicable to all not-for-profit entities:

In January 2017, the FASB amended the Not-for-Profit Entities Topic of the Accounting Standards Codification to clarify consolidation guidance for not-for-profit entities. The amendments will be effective for the Organization for fiscal years beginning after December 15, 2016 and interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted. The Organization is currently evaluating the effect that implementation of the new standard will have on its financial statements.

ASU 2017-03 ― Applicable to SEC filers:

In January 2017, the FASB updated the Accounting Changes and Error Corrections and the Investments—Equity Method and Joint Ventures Topics of the Accounting Standards Codification.  The ASU incorporates into the Accounting Standards Codification recent SEC guidance about disclosing, under SEC SAB Topic 11.M, the effect on financial statements of adopting the revenue, leases, and credit losses standards.  The ASU was effective upon issuance. The Company is currently evaluating the impact on additional disclosure requirements as each of the standards is adopted, however it does not expect these amendments to have a material effect on its financial position, results of operations or cash flows.

ASU 2017-04 ― Applicable to all:

In January 2017, the FASB amended the Goodwill and Other Topic of the Accounting Standards Codification to simplify the accounting for goodwill impairment for public business entities and other entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. The amendment removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.  The effective date and transition requirements for the technical corrections will be effective for the Company for [reporting periods beginning after December 15, 2019.-public business entities that are SEC filers] [reporting periods beginning after December 15, 2020.-public business entities that are not SEC filers] [reporting periods beginning after December 15, 2021.-all other entities] Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2017-05 ― Applicable to all:

In February 2017, the FASB amended the Other Income Topic of the Accounting Standards Codification to clarify the scope of the guidance on nonfinancial asset derecognition as well as the accounting for partial sales of nonfinancial assets. The amendments conform the derecognition guidance on nonfinancial assets with the model for transactions in the new revenue standard. The amendments will be effective for the Company for [reporting periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2017-06 ― Applicable to employee benefit plans:

In February 2017, the FASB amended the guidance related to employee benefit plan master trust reporting. The new guidance provides for presentation within the plan’s financial statements of its interest in a master trust as a single line item; disclosure of the master trust’s investments by general type as well as by the dollar amount of the plan’s interest in each type; disclosure of the master trust’s other assets and liabilities and the balances related to the plan; and elimination of required disclosures for Section 401(h) accounts that are already provided by the associated defined benefit plan. The amendments are effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Plan does not expect these amendments to have a material effect on its financial statements.

ASU 2017-07 ― Applicable to entities that offer defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under ASC 715:

In March 2017, the FASB amended the requirements in the Compensation—Retirement Benefits Topic of the Accounting Standards Codification related to the income statement presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. The amendments will be effective for the Company for [interim and annual periods beginning after December 15, 2017.-public business entities] [annual periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019.-all other entities] Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

ASU 2017-08 ― Applicable to entities that hold investments in callable debt securities held at a premium

In March 2017, the FASB amended the requirements in the Receivables—Nonrefundable Fees and Other Costs Topic of the Accounting Standards Codification related to the amortization period for certain purchased callable debt securities held at a premium. The amendments shorten the amortization period for the premium to the earliest call date. The amendments will be effective for the Company for [interim and annual periods beginning after December 15, 2018.-public business entities] [annual periods beginning after December 15, 2019, and interim periods within annual reporting periods beginning after December 15, 2020.-all other entities] Early adoption is permitted. The Company does not expect these amendments to have a material effect on its financial statements.

Applicable to all:

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.