Construction Contractors – FASB Discusses PCC’s Project on Presentation of Contract Assets and Liabilities

As reported in its “Summary of Decisions” publication, the FASB met on October 16, 2024, and discussed the Private Company Council’s (PCC’s) project on the presentation of contract assets and contract liabilities for construction contractors.

The FASB endorsed the PCC’s decision that the scope of the presentation alternative would be private construction companies within the scope of Topic 910, Contractors—Construction. The FASB also endorsed the PCC’s decision to provide an alternative for private companies to present contract assets and contract liabilities on a gross basis on the statement of financial position. The presentation alternative would be applied at the entity level. The FASB endorsed the PCC’s decision to require that a private company disclose when it has elected the presentation alternative.

In addition, the FASB endorsed the PCC’s decision to require a full retrospective transition approach and related transition disclosures. The Board also decided that when a private company initially applies the presentation alternative for contract assets and contract liabilities, it need not justify that the use of the accounting alternative is preferable as described in paragraph 250-10-45-2.

Investor Advisory Committees – New Edition of GAAP Update Service Published

We have published a new edition of the GAAP Update Service, Special Edition: The Investor Perspective. This new edition provides an overview of the investor advisory committees of the FASB and SEC and the topics they have been addressing. Finance and accounting professionals may be interested to learn how these investor advisory committees influence financial reporting.

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AUDITING AND INTERNAL CONTROLS HEADLINES

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Audits of Single Financial Statements – New Edition of GAAS Update Service Published

We have published a new edition of the GAAS Update Service, Practice Issues and Questions & Answers Relating to AU-C Section 805, “Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement.” This new edition discusses AU-C Section 805, which addresses the auditor’s responsibility when applying generally accepted auditing standards (GAAS) in an audit of a single financial statement or of a specific element, account, or item of a financial statement.

Brokers and Dealers – AICPA Publishes New Edition of Audit and Accounting Guide

The AICPA has published a new edition of its Audit and Accounting Guide, Brokers and Dealers in Securities. This guide delivers the support you need to comply with numerous broker-dealer requirements.

The 2024 edition includes updated discussion of several topics, including the following:

• Digital assets, including accounting for the safeguarding of crypto assets;
• Shortened securities transaction settlement cycles under new SEC rules;
• Recently effective electronic recordkeeping and financial responsibility requirements under SEC rules;
• Other recent SEC releases and FINRA rule amendments;
• Fractional shares and fully paid securities lending; and
• Controls and monitoring activities, including broker-dealer information systems and application controls.

State and Local Governments – AICPA Publishes New Edition of Audit and Accounting Guide

The AICPA has published a new edition of its Audit and Accounting Guide, State and Local Governments. This guide helps both new and experienced auditors to understand the GAAP applicable to the financial statements of state and local governments and audit and report on those financial statements in accordance with generally accepted auditing standards.

This guide is based on pronouncements issued or cleared by GASB, contains a small amount of category B accounting guidance, and has been updated for the following guidance:

• GASB Statement No. 99, Omnibus 2022;
• GASB Statement No. 100, Accounting Changes and Error Corrections — an amendment of GASB Statement No. 62;
• GASB Statement No. 101, Compensated Absences;
• GASB Statement No. 102, Certain Risk Disclosures;
• GASB Implementation Guide No. 2023-01, Implementation Guidance Update — 2023;
• Statement on Auditing Standards (SAS) No. 143, Auditing Accounting Estimates and Related Disclosures (AU-C sec. 540);
• SAS No. 144, Amendments to AU-C Sections 501, 540, and 620 Related to the Use of Specialists and the Use of Pricing Information Obtained From External Information Sources;
• SAS No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Page 3 of 4 Misstatement (AU-C sec. 315)
• SAS No. 147, Inquiries of the Predecessor Auditor Regarding Fraud and Noncompliance With Laws and Regulations (NOCLAR).

Preparation, Compilation, and Review Engagements – AICPA Publishes New Edition of Audit and Accounting Guide

The AICPA has published a new edition of its Audit and Accounting Guide, Preparation, Compilation, and Review Engagements. This guide provides current guidance on the requirements for SSARS engagements involving financial statements, pro forma financial information, and personal financial statements. The 2024 edition is an essential resource for both new and seasoned accountants providing these types of services.

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GOVERNMENT HEADLINES

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Financial Data Transparency Act – New Edition of Governmental GAAP Update Service Published

We have published a new edition of the Governmental GAAP Update Service, Decoding the Financial Data Transparency Act (FDTA). This new edition discusses how FDTA may impact your government.