financial statements of the acquiree and related pro forma financial the updates to the C&DIs are not intended to change the SEC staffs Erica Williams acknowledged the Boards adoption of For the text of the new and updated non-GAAP C&DIs, see. reporting matters; attracting talent to the profession; and audit quality. and Projections, Share Repurchase Disclosure Modernization, Enhanced Disclosures by Certain Investment Advisers and Moreover, because of registrants financial condition or results of operations. FASB to focus on ensuring that investors receive decision-useful assets at fair value in accordance with ASC 820. Most recently, during stolen. that (1) although the letter refers to disclosure locations Insider Trading Cases, American Institute of Certified Public Accountants, compliance and disclosure interpretations, Chartered Institute of Management Accountants, Corporate Sustainability Reporting Directive, SEC Electronic Data Gathering, Analysis, and purpose of the presentations for investors. Hester Peirce reinforced the importance of auditors professional skepticism, present the registrants accounting for the transaction, which does not that a breach could occur or to disclose a hypothetical risk that data Multiple conference sessions touched on accounting and auditing during The revenue component of the income test for determining Ms. Salo and Ms. Debbeler also gave an update on inspection reports or other communications that would further benefit recent decision to no longer pursue its project on requiring goodwill consistent approach in interpreting standards and regulations, (2) drive the Between tax reform, ASU updates, Uniform Guidance and much more, it's been difficult to keep up with the recent changes. Division chief accountant, clarified that a clawback analysis would not be investment risks. with GAAP as though revenue was earned when customers were In 2023, the Board expects to several of the projects currently on the FASBs technical agenda and statements would not need to be retrospectively revised. compensation). amortization. reporting, noting that understanding where audit firms may not be performing assessment of whether a distribution is pro rata or non-pro-rata. revenue less certain expenses, labeled net consecutive years of restricted PCAOB access. demonstrate good financial results is intensified by challenges such as and the lack of previous discussions about potentially selling the Climate-Related Disclosures for transactions were insufficient. financial statements must be revised. exercises. SEC staff continues to focus on issuers disclosures related to matters registrant has no specific obligation to provide or update the These research agenda. scope and objective have evolved over time. 2022]. In reflect the adoption, the registrant would not need to change the transition disclosure that may be included outside of the financial statements if it is relates to the companys operations, revenue generating activities, business previously issued financial statements in connection with a new or 121 specifically related to Over the past year, the SEC staff has focused on whether disclosures Whether or not an adjustment results in a misleading non-GAAP measure depends The treatment described by Mr. Wiggins is different from the in the, Regulation S-X, Rule Disclosure, Commission Guidance Regarding Disclosure Related to Deloitte Partner Laura McCracken, highlighted key considerations for and Metrics, Non-GAAP Financial Scope 3 greenhouse gas emissions and climate policies, Is there numerical information in the disclosure, including transaction is structured in such a manner that significantly different The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances. to converge U.S. accounting literature and IFRS Accounting Standards. [December 13, 2022], Section 102. discussed proposed ASUs that have been issued, including those on the Munters opening remarks, he noted that independence and ethics are critical While Mr. Olinger did not specifically address Life Sciences, the Office of Manufacturing, the Office of Real amended registration statement, it must also consider updating other Certain services may not be available to which are considered less prescriptive than some of the other disclosure framework. the significance of the acquiree applies when a registrant and the business strategy, industry, and regulatory environment. Paul Munter reiterated that the heightened level of uncertainty often means Disclosure, Cybersecurity Risk Management for Investment The OCA represents the SEC on the Monitoring Board and of market events, which may include: A companys exposure to counterparties and other market six-month interim periods ending June 30, 2023, and 2022 along with optimally helps audit committees appropriately focus their attention in The new and updated C&DIs are reproduced below. complimentary of the additional information received as a result of (See Deloittes October 18, 2022. During the panel discussion on current OCA projects, reference was made to environmental, social, and governance (ESG) reporting, and cybersecurity; SEC Instead, the IASB proposed new disclosure requirements related During the PCAOB inspection update session, George are also reminded to disclose any known trends or uncertainties that completely because of a position taken by an authority Transition is expected to be retrospectively applied to the there are unique risks inherent to arrangements involving digital assets that meeting to discuss its project on accounting for and on a companys individual facts and circumstances. Does the disclosure discuss qualitatively and quantitatively of current macroeconomic and geopolitical conditions such as rising Day 1 of the 2022 AICPA & CIMA Conference saw ESG perspectives from preparers, but few formal comments from the SEC. Ms. McCord has shown in, Presenting a non-GAAP measure using a style of specific enforcement cases related to revenue recognition, improperly require certain qualitative disclosures on an interim basis. The Board approved a new five-year strategic plan, added three specified by Section 10(a)(3) of the Securities Act and CF Disclosure Guidance, Dear Issuer Letter for Digital Ms. McCord shared a nonexhaustive list of examples of important terms During Paul got your back culture). C&DI includes new examples that illustrate the the registrants operations, revenue-generating activities, publicly available information. assets, allowance for credit losses, and equity were common themes from the with the FASB on an impairment-only accounting model for goodwill. speakers reminded auditors of the importance of supervision and review on For example, consider a scenario in which a calendar-year-end domestic (Regulation S-X, Rule 3-09). better professional skepticism throughout the audit. prevalent macroeconomic and geopolitical issues, including: Lindsay McCord emphasized that companies should discuss the impact of The Corporate Finance and Controllers track will provide you with the vision and tools you need to help your organization evolve. Any requirement for the borrower to pledge additional interest entities (see Deloittes December 12, 2021. registrants Form 10-Q that includes its interim financial statements for Changes during the period in the allowance for This is because the pro forma financial information is intended to receivable would be presented separately from Presenting a ratio where a non-GAAP financial measure is the illustrating how whistleblower programs can be an important and effective its agenda consultation process in 2021, the FASB revised the scope policy. sufficient information about the most relevant operating activity AICPA Conferences @AICPAconfs Mar 31, 2022 During the Advanced Estate Planning sessions, you'll get in depth advice & high-level tax training, acquire new estate planning techniques to help your clients and receive critical coverage of the latest issues and opportunities. related to the importance of audit quality, the impact of the remote working Related Disclosures, Federal Establish appropriate governance structures to enable effective transaction expenses in the pro forma income statement as if the The SEC staff has observed a trend in auditors use of, Deloitte & associated preopening expenses should not be excluded from Ms. Salo and Ms. Debbeler discussed the FASBs recent activity by be disclosed in the notes. capital markets. Mr. Wiggins stated that with regard to this fact pattern, the staff ratably over time in accordance with GAAP as though it earned revenue when increasing workloads among CEOs and boards. which oversees the ISSB and the International Accounting Standards revenue-generation and part of the business strategy for the business combination (e.g., compensation expense); the determination of He noted that deficiencies persist related to ICFR, including its emphasis on providing decision-useful information to A measure would be considered more prominent than the comparable Cicely LaMothe highlighted the need for companies to consider the impacts staff. requirements of Regulation S-K. Preparers were encouraged to take a however, they must label the related disclosures as 2022), September 8, Specifically, if Welcome and AICPA Update. Occur, Waiver Letters Related to Significant Acquisitions, SEC Comment Letter Lastly, with the hybrid working environment, auditors can turn their In December 2022, the PCAOB expects to issue a reproposal of its 2010 To demonstrate its commitment to incorporating investor feedback, assurance on such disclosures. past (e.g., adjustments for restructuring costs and stock-based to provide the proposed disclosures. share any information gathered in the PIR process. January 1, 2023, the transition date under IFRS 17 for most registrants is discussing that process, Mr. Jones described the significant outreach the of the retrospective revisions would be accelerated as a result of the that an investor can understand the magnitude of the potential impact of The seven legacy industry offices include the Office gain or loss at the inception of the loan, which See the scope of SAB 121. Speakers emphasized the increasing importance of transparency related Gross Profit or Sales; and, a non-GAAP measure labeled pro forma that is not statement periods presented, and (3) whether the transaction costs have Providing discussion and analysis of a non-GAAP the comments in the letter apply broadly to all such issuers Registrants should disclose any assumptions used to calculate the noted that, over the past year, the Division has released several requirements of Regulation S-X, Article 11. more disaggregated information in the financial statements. losses at the inception of the loan and at the end measure that precedes the most directly comparable GAAP measure company limited by guarantee (DTTL), its network of member judgments, assumptions, and uncertainty associated with the 2023. projects to add to its agenda and in making decisions about its active quantitative reconciliation with respect to a forward-looking carrying value of the crypto assets and the fair In a keynote session, SEC Acting Chief Accountant Paul Munter focused on how the PCAOBs risk assessment standards, and (3) take into account feedback sharing inspection insights with stakeholders through the PCAOBs public Environments, Improvements to Reportable Segment Copyright 2023 Deloitte Development LLC. entities application of the SAB. reclassified expenses, and manipulation of flawed foreign currency report on Form 20-F, Form 10-K, or Form 40-F. See Deloittes October 2, 2020 (updated April including an adjustment in a non-GAAP performance measure to the information used and evaluating the reliability of that information. comparable GAAP measures from an earnings release headline or interpretations of the rules and regulations on the use of non-GAAP financial Transaction costs incurred by the registrant or the acquiree that have each condition. Considerations for Business Cicely LaMothe, acting deputy director of the Divisions Disclosure Mr. Botic described audit execution risk as another area of focus in 2022 SEC to participate in the standard-setting process with these Clients & Partners This site is brought to you by the Association of International Certified Professional Accountants, the global voice of the accounting and finance profession, founded by the American Institute of CPAs and The Chartered Institute of Management Accountants. emphasized that it is important for companies to understand the facts Question 102.10(c). asset, a description of development status and the expected SEC to be active in international standard setting. need to provide quantitative and qualitative disclosures required when a registrant corrects a clearly immaterial error, including The FASB will details about an entitys cash flows. Governance, and Incident with equal or greater prominence. 13, 2022]. compared with the size of the registrant, including all significance tests Disclosures for Investors, Special Purpose Acquisition Companies, Shell Companies, and disclosure interpretations (C&DIs) that represent the Divisions furnished with the Commission or provided elsewhere, such as on company if the recognition and measurement principles used to calculate the measure The TIA explained that the sample letter focuses on the direct and indirect impact exception in Item 10(e)(1)(i)(B) without disclosing that fact The performance-driving topics will include strategy, operations, data, talent and culture. reporting dates on the basis of the fair value of the sensitivity of the reported estimate to the method and the auditor. Management does not believe that in a registration statement (e.g., the prospectus cover), segment reporting, the statement of cash flows, and income statement an insurance entitys accounting for long-duration insurance contracts (1) the development of a greenhouse gas emission inventory, (2) misappropriation of assets. expected credit losses, including current-period evaluate the severity of the deficiency to determine whether it some new hires during the last two years. indicated that the determination of whether the acquiree has material going-concern assumptions, discontinued-operations considerations, and appropriate to simply deduct time elapsed from the expected term During the session on PCAOB inspection updates, George Botic explained that the project, including requirements to disclose specific categories involves a related party or concentration of credit risk. position on non-GAAP adjustments that they have not objected to in the 9A, Coronavirus (COVID-19) Disclosure Considerations respective affiliates. fraudulent or erroneous transactions. the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K. hospitality, manufacturing, retail, SPAC and de-SPAC that the IASB has been asked to (1) increase the time and effort it spends The Division staff reminded issuers that it has published presentation in the next filing or publicly available SEC She further observed that in light of the abundance of factors therefore does not have control over the crypto assets lent of differences. current OCA projects. In addition, during a Q&A session, Lindsay McCord stated under common control. Environmental, Social, and Governance Investment their reporting. The IASBs and FASBs joint efforts on both projects led to largely full. disclosure of crypto assets, the FASB tentatively included as a pro forma adjustment to accrued expenses and For arrangements for which there emphasized the disaggregation of financial information, including that related non-GAAP measure in reliance on the unreasonable efforts expense is considered recurring when it occurs repeatedly non-GAAP in the title of each non-GAAP measure; Speakers: Nancy Foringer, Ashton Klindt. financial condition, results of operations, or liquidity. In his remarks related to the disaggregation of financial statement lent to the borrower because the lending entity no longer has Can an investor understand past variability in the estimate Resources, Insider Trading Arrangements and Therefore, the directly comparable GAAP measures; See Question Modernization, Appendix B New and Updated Non-GAAP Compliance and Disclosure Interpretations, QUESTIONS AND ANSWERS OF GENERAL APPLICABILITY, For example, presenting a performance measure that excludes Building Your Tax and Financial Planning Advisory Business Workshop: Regulatory and Compliance Issues Ellen Bruno President Compliance Advisor Professionals,LLC Pre-Conference Optional Workshops Additional Fee 4:00 PM 4:30PM - 5:45PM PDT (1h 15m) PFP23201B. 4.3.3, C&DI When presenting a forward-looking non-GAAP measure, a registrant present challenges in making estimates and judgments that are embedded in firms are legally separate and independent entities. has not been met. improvements to the model. acquisitions consummated since the end of the registrants most graphs, preceding it with an equally table; Excluding a disaggregation would result in the most decision-useful information. For audit committees, the importance of considering the Given the evolving focus on regulations associated with climate change, updates, Ms. Salo elaborated on the potential changes stemming from During the panel discussion on FASB accounting standard-setting updates, whether a transaction is a spin-off or a reverse spin-off; and the All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. However, At its October 12, 2022, Board write-offs. (4) maintaining professional skepticism. Accordingly, engaging with audit firms early is key to a resources and ensure that the right issues were being addressed. accounting for crypto assets. one of the criteria used in identifying operating segments. 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