Third Quarter — 2022
Welcome to Quarterly Accounting Roundup: Third Quarter — 2022. Recent standards issued by the FASB include (1) a final Accounting Standards Update (ASU) clarifying the guidance in ASC 8201 on the fair value measurement of an equity security subject to a contractual sale restriction and (2) proposed ASUs on the transition guidance related to sold insurance contracts and on accounting for investments in tax credit structures.
As usual, it was a fairly busy quarter for the SEC. Probably the most significant development was the Commission’s issuance of a final rule on pay versus performance, under which certain registrants must provide disclosures about executive pay and company performance within any proxy statement or information statement for which executive compensation disclosures are required. According to SEC Chair Gary Gensler, the final rule, which adds Item 402(v) to SEC Regulation S-K, is intended to “help investors receive the consistent, comparable, and decision-useful information they need to evaluate executive compensation policies. That serves investors and our markets.” In addition to the pay-versus-performance rule, other notable recent SEC publications include amendments to the rules governing its whistleblower program, a final rule that makes certain inflation adjustments to the revenue threshold for emerging growth companies (EGCs), and a request for comment on the Commission’s draft strategic plan for 2022–2026.
There was also a flurry of activity at the PCAOB. Particularly notable was the release of a rule that is intended to “strengthen the requirements and responsibilities that apply to auditors who plan and perform audits that involve other accounting firms and individual accountants.” In addition, the PCAOB signed a Statement of Protocol agreement with Chinese authorities that serves as an initial step in opening access for the PCAOB to “inspect and investigate completely registered public accounting firms in mainland China and Hong Kong,” released a request for comment on its five-year strategic plan, and published a resource for audit committees, among other things. (For more information about the PCAOB’s recent activities, see Deloitte’s June 28, 2022, Heads Up.)
For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”