Preparing for Year-End 2018: Number Nine – FEI Insights About Changes in ICFR for New Accounting Standards

As companies worked through the implementation of the new revenue recognition standard they dealt with two issues surrounding ICFR:

What changes were required to ICFR for this new standard, and

Whether or not these changes to ICFR required reporting a material change in ICFR.

Reporting material changes in ICFR is a requirement in both Form 10-K and Form 10-Q and involves substantial amounts of judgment.  This postreviews the details of this requirement.

As we grapple with the new Lease and Credit Losses standards, to help us with the ICFR change process, FEI published two research studies in November 2018:

A Lessee’s Guide to Implementing Internal Control over Financial Reporting for contracts accounted for under Accounting Standards Codification (ASC) 842, Leases

and

A Guide to Implementing Internal Control over Financial Reporting for the Current Expected Credit Loss (CECL) Standard.

The reports were issued by FEI’s Committee on Corporate Reporting (CCR).  (Our workshop leader Reed Wilson is a member of CCR, and thanks to him for the heads-up about these reports).  Both are designed to help companies anticipate ICFR issues they may encounter as they implement these new standards and also provide examples for documentation and processes.

As always, your thoughts and comments are welcome!

2 thoughts on “Preparing for Year-End 2018: Number Nine – FEI Insights About Changes in ICFR for New Accounting Standards

  1. Hi George,
    I’m using the FEI power point link in this article to assist with risk assessment and controls identification and review for ASC 842. I’m looking for a sample ASC 842 lease narrative/policy (template). Have you come across any?

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