Tag Archives: SEC

VIE Redux, and Perhaps a Bit Under the Radar…

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The FASB is very close to finalizing new guidance that is expected to have a significant impact on VIE consolidation accounting. This new standard will require revisiting many, if not most, VIE determinations. It will change many existing VIE determinations.

The ASU is expected to be issued before the end of this year and to be effective in 2016 for public companies, with early adoption allowed.

This project has been in process for a long time, and the final stages are sneaking up on many of us. Because of the information that this redetermination will require, companies should:

  • Get out in front of determining what information they will need,
  • Proactively deal with the issues they may encounter in obtaining this information, and
  • Develop the new processes and controls these changes will necessitate.

During the development of the ASU most of the focus has been on investment management companies. The new VIE approach will have a significant impact in this industry. However, it will also impact most limited partnerships and will have a variety of other impacts.

The most significant areas that will be affected include:

  • Whether or not a limited partnership and similar entities are VIEs, and in particular the impact of kick-out rights,
  • When a general partner should consolidate a limited partnership, and again the impact of kick-out rights,
  • When and how variable interests held by the reporting entity’s related parties or de facto agents should affect consolidation conclusions,
  • How a fee paid to a decision maker or service provider by a VIE should affect the consolidation determination, and
  • When to require disclosures for a limited partnership that is a VIE but not consolidated by the reporting entity.

You can learn more about the project and its impact at:

http://www.fasb.org/jsp/FASB/FASBContent_C/ProjectUpdatePage&cid=1176157176582

As always, your thoughts and comments are welcome!

 

Happy Anniversary?

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It was six years ago today, September 15, 2008, that Lehman Brothers filed for bankruptcy.  And the day before that, the deal was hashed for Bank of America to buy Merrill Lynch.  What a long strange trip we have all been on, and are all still traveling.  You know what they say about past mistakes…

Back in the present, we are all anticipating the biggest IPO ever, or is it? – stay tuned.

As always, we would love to hear your comments!

XBRL Next Steps

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As we blogged about during the summer, the SEC has started to issue documents concerning XBRL issues. Two of our earlier posts dealt with the special study about the use of extensions and the “Dear CFO” letter about calculation relationships (links are below).

Another event that may elevate the visibility of XBRL issues in the reporting community is going to happen on September 9 at 1pm – the FASB is hosting a 90 minute XBRL webcast to discuss the 2015 Taxonomy, which was just released for public comment today, September 2.

The title of the webcast is:

IN FOCUS: Proposed 2015 GAAP Financial Reporting Taxonomy, ASU Taxonomy Changes, Taxonomy Implementation Guides, Taxonomy Simplification

Interestingly, SEC Staff from the Office of Interactive Date will be speaking.

How may of us are hoping the simplification topic is a major theme?

You can register for the webcast at:

http://www.fasb.org/cs/ContentServer?c=FASBContent_C&pagename=FASB%2FFASBContent_C%2FNewsPage&cid=1176164317486

And, just in case you want to find them again:

The special study by DERA, the Division of Economics and Risk Analysis about the use of custom tags, aka extensions, is at:

http://www.sec.gov/dera/reportspubs/assessment-custom-tag-rates-xbrl.html#.VAXPt0stnGk

The Dear CFO letter about calculation relationships is at:

http://www.sec.gov/divisions/corpfin/guidance/xbrl-calculation-0714.htm

 

A New Chief Accountant for the SEC

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The SEC announced the appointment of James Schnurr as it’s chief accountant yesterday. Jim will join the Commission in October, replacing Paul Beswick, who announced his resignation in May.

Congratulations Jim!

To learn more about Jim, you can find the SEC’s Press Release at:

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542757519

As always, we would love to hear your comments!

XBRL Starting to Bubble-Up to the Comment Letter Surface?

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One of the questions that SEC reporting companies have asked about XBRL (among the many questions we ask about XBRL!) is when will the SEC start to write comments about XBRL submissions?

Very few companies have ever seen a comment letter include any mention of their XBRL submissions.

It appears that comments may be starting to be issued about XBRL.  One of the ways the SEC sends messages in in a kind of generic comment letter that they call a “Sample Letter Sent to Public Companies”, which we refer to as a “Dear CFO Letter”.

While this seems to lack the impact of a comment letter sent directly to a company, the Dear CFO Letter is actually just as important as a directly received comment letter.  It is a message to a broad group of companies about an issue that the SEC thinks is pervasive, and is, in essence, a broadly transmitted comment letter.

The most recent Dear CFO Letter actually deals with XBRL!  You can find it at:

http://www.sec.gov/divisions/corpfin/guidance/xbrl-calculation-0714.htm

The letter reminds registrants to be sure to include all calculation relationships.

It also includes this language:

“Acceptance of your filing by EDGAR does not mean that your filing is complete or in compliance with the Commission’s requirements.”

This Dear CFO letter coupled with the XBRL report we blogged about last week could be the start of a greater emphasis on XBRL matters in filings.

We would love to hear your comments!  Leave them here or email Carol or George.