Year in Review — 2019

by Magnus Orrell and Joseph Renouf, Deloitte & Touche LLP

Welcome to Quarterly Accounting Roundup: Year in Review — 2019. Notable standards issued by the FASB in 2019 include Accounting Standards Updates (ASUs) that:

Change some effective dates for certain new accounting standards, including those on hedging (ASU 2017-121), leases (ASU 2016-022), credit losses (ASU 2016-133), goodwill impairment testing (ASU 2017-044), and long-duration insurance contracts (ASU 2018-125).
Revise certain aspects of the FASB’s new credit losses standard.
Clarify certain aspects of the accounting for credit losses, hedging activities, and financial instruments.
Make Codification improvements to the Board’s new leasing standard.
Clarify the accounting for share-based payments issued as sales incentives to customers.
Extend certain private-company alternatives to not-for-profit entities.

The FASB has also announced that it expects to publish an ASU early next year that will provide some relief to entities that are affected by reference rate reform.

On the regulatory front, SEC Chairman Jay Clayton announced that the Commission advanced 34 of the 39 rules on its near-term agenda in 2019 (as of December 10, 2019). Noteworthy final rules released by the SEC in 2019 include those that (1) modernize and simplify certain disclosure requirements in Regulation S-K; (2) amend the capital, margin, and segregation requirements for security-based swap dealers and broker-dealers (as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act); (3) enhance the guidance on retail investors’ relationships with financial professionals; and (4) amend the auditor independence rules. The SEC staff also released a statement that highlights risks for entities to consider as they transition away from the London Interbank Offered Rate (LIBOR). Further, the SEC issued proposed rules that would amend (1) disclosures for acquisitions or dispositions of businesses; (2) the definitions of accelerated filer and large accelerated filer (the population of registrants that qualify as nonaccelerated filers, and that are thus not required to obtain an auditor attestation report on internal control over financial reporting, would be expanded); (3) disclosures related to a registrant’s business, risk factors, and legal proceedings; and (4) proxy requirements.

The AICPA held its annual Conference on Current SEC and PCAOB Developments in early December. During the conference, representatives from the SEC, PCAOB, FASB, IASB®, and other organizations provided updates on new developments, regulations, and current priorities. Topics that dominated the conversation at this year’s conference included the FASB’s new standards on revenue recognition, leases, and credit losses; emerging issues, including reference rate reform, digital assets, and cybersecurity; SEC reporting matters; audit quality; auditor independence; and critical audit matters (CAMs).

For more information about the conference, see Deloitte’s December 15, 2019, Heads Up.

Note that Quarterly Accounting Roundup: Year in Review — 2019 summarizes final guidance that affects reporting and disclosures for the coming reporting season. With the exception of fourth-quarter developments, proposed guidance is not included. For more information about earlier proposals, please see issues of Quarterly Accounting Roundup for the first three quarters of 2019.

In addition, note that in this year-end edition, an asterisk in the article title denotes events that occurred in the fourth quarter, including updates to previously reported topics, or that were not addressed in previous 2019 issues of Quarterly Accounting Roundup. Events without asterisks were covered in previous issues.

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To read the entire Quarterly Accounting Roundup: Year in Review — 2019, download the PDF.

Footnotes

FASB Accounting Standards Update No. 2017-12, Targeted Improvements to Accounting for Hedging Activities.

FASB Accounting Standards Update No. 2016-02, Leases.

FASB Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments.

FASB Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment.

FASB Accounting Standards Update No. 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts.