Heads Up Newsletter

This issue discusses recent activities related to group audits, including the PCAOB’s new rule related to the Holding Foreign Companies Accountable Act and other standard-setting activities.

This Heads Up discusses a sample letter recently released by the SEC’s Division of Corporation Finance (DCF) that highlights the types of comments the DCF may issue to public companies regarding climate-related disclosures.

This Heads Up discusses the FASB’s recently issued Accounting Standards Update (ASU) No. 2021-05, Lessors — Certain Leases With Variable Lease Payments. The ASU requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate as an operating lease on the commencement date of the lease if specified criteria are met.

This Heads Up discusses the increasing importance of providing consistent, comparable, and transparent disclosures about environmental, social, and governance (ESG) matters. Companies should begin to prepare themselves for mandatory climate-related and other ESG disclosures, since this regulated landscape for ESG disclosures will differ significantly from the current landscape of voluntary reporting. In the forthcoming regulatory environment, it will be essential for companies to improve the completeness, accuracy, and reliability of their ESG-related disclosures by employing sound governance, oversight, and data-management processes and controls.

This Heads Up examines certain potential effects of environmental, social, and governance (ESG) matters on a company’s financial accounting and reporting in the context of the existing accounting guidance and the current regulatory environment. While these effects will vary depending on the company’s industry along with factors such as relevant regulatory, legal, and contractual obligations, all entities should evaluate ESG-related financial accounting and reporting implications.

This issue discusses the FASB’s recently issued proposed Accounting Standards Update (ASU), Fair Value Hedging — Portfolio Layer Method, which would clarify the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of prepayable financial assets. The proposal would amend the guidance in ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities (released on August 28, 2017), which established a method for making such fair value hedge accounting more accessible and was issued in response to feedback and questions received from stakeholders. Comments on the proposed ASU are due by July 5, 2021.