Accounting & Auditing Standards Update: Fortune Favors the Prepared

Accounting & Auditing Standards Seminar

Tuesday, October 4th, 2016

Recorded on Tuesday, October 4th

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Major accounting standards involving revenue recognition, leases and financial instruments have finally been completed. These standards will impact every entity, which produces GAAP financial statements, in a substantial way. For many, these Accounting Standards Updates (ASUs) are the most significant changes of their professional careers and continued procrastination of implementation will likely come with higher implementation costs, increased capital costs, and commercial disadvantages.

Starting in May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers culminating a 12-year process to achieve convergence with the International Accounting Standards Board (IASB) on revenue recognition. The converged revenue recognition standard eliminates substantially all industry based guidance while introducing significant judgment and will alter the conduct of business in certain industries. With the 2018/2019 effective date nearing, attendees will learn how the revised standard impacts them and how to prepare for implementation.

In February 2016, The FASB issued ASU 2016-02 on lease accounting culminating another decade long convergence process with the IASB. The new standard redefines the notion of operating and capital leases and in doing so will significantly reduce the number of off balance sheet leasing arrangements. As leasing decisions are being made today, companies will need to understand the future impacts on their financial statements and financial ratios.

The FASB issued ASU 2016-13, Financial Instruments – Credit Losses, in June 2016. This new standard shifts financial instrument impairment accounting from an ‘incurred loss’ to a ‘expected loss’ model. The scope of the new standard on impairment of financial instruments includes trade accounts receivable and notes receivable held by almost all entities. The scope and impact is not limited to just regulated financial institutions

Barnes Dennig Assurance Service Line Leader Thomas J. Groskopf, CPA, MBA, CVA headlines the presentation of these accounting standards changes and the impact on financial statements as well as business in general. As a member of the PCC and also the Technical Director of the AICPA’s Center for Plain English Accounting (a national A&A resource center for CPA firms), he provides knowledge, analysis, and guidance on these changes unmatched in our region.