Second Quarter — 2022

by Magnus Orrell and Joseph Renouf, Deloitte & Touche LLP

Welcome to Quarterly Accounting Roundup: Second Quarter — 2022. Recently released FASB standards include Accounting Standards Updates (ASUs) that (1) amend the Board’s guidance related to troubled debt restructurings and credit loss vintage disclosures and (2) amend the guidance in ASC 8151 on fair value hedge accounting of interest rate risk for portfolios of financial assets. The Board also released a proposed ASU that would defer the sunset date for the guidance on reference rate reform in ASC 848 and amend related guidance in ASC 815.

In other news, the economic implications of the ongoing Russia-Ukraine war have continued to grab headlines this quarter. Accounting and financial reporting topics that have received particular attention during the crisis include asset seizure, the potential effects of deconsolidation on the cumulative translation adjustment of a foreign entity, and the possible impacts of the conversion of contracts to Russian rubles. In addition, the SEC has posted to its Web site a sample letter highlighting the types of comments the SEC’s Division of Corporation Finance may issue to public companies regarding disclosures about the impact of the war on their business and related supply-chain issues. The PCAOB has also weighed in, publishing a spotlight on auditing considerations related to the conflict.

Moreover, the focus on environmental, social, and governance (ESG) disclosure requirements has continued to accelerate, both domestically and internationally. The SEC issued proposed rules that would (1) enhance and standardize the climate-related disclosure requirements for public companies and (2) “promote consistent, comparable, and reliable information for investors concerning funds’ and advisers’ incorporation of [ESG] factors.” Meanwhile, the International Sustainability Standards Board (ISSB) released two exposure drafts (EDs) that would establish “requirements for the disclosure of material information about a company’s significant sustainability-related risks and opportunities that is necessary for investors to assess a company’s enterprise value.”

The SEC has also been busy in other areas. Other significant developments at the Commission include (1) a Staff Accounting Bulletin (SAB) that provides “interpretive guidance for entities to consider when they have obligations to safeguard crypto-assets held for their platform users” and (2) a proposed rule that would “enhance investor protections in initial public offerings [IPOs] by special purpose acquisition companies [SPACs] and in subsequent business combination transactions between SPACs and private operating companies [also known as de-SPAC transactions].”

Footnotes

For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”

Conclusions of the FASB, GASB, IASB, and IFRS Interpretations Committee are subject to change at future meetings and generally do not affect current accounting requirements until an official position (e.g., Accounting Standards Update or IFRS Accounting Standards) is issued. Official positions are determined only after extensive deliberation and due process, including a formal vote.

Further information about the standard setters can be found on their respective Web sites as follows: www.fasb.org (FASB); https://www.fasb.org/page/PageContent?pageId=/about-us/advisory-groups/eitf/openissuesandproposedagenda.html (EITF); https://www.aicpa-cima.com/home (AICPA & CIMA); www.sec.gov (SEC); https://pcaobus.org (PCAOB); https://fasab.gov (FASAB); www.gasb.org (GASB); and www.ifrs.org (IASB and ISSB).

Quarterly Accounting Roundup is prepared by members of Deloitte’s National Office. The purpose of this publication is to briefly describe key regulatory and professional developments that have recently occurred in the field of accounting and to provide links to locations where additional information can be found on each topic. Readers seeking additional information about a topic should review the information referred to in the hyperlinks and not rely solely on the descriptions included in this communication.

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