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CPAJ News Briefs: FASB, PCAOB

By: Thomson Reuters Checkpoint

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FASB News

‘All’ Software Costs Will Be Addressed Under New FASB Project

According to FASB, the current guidance on accounting for software costs is outdated and thus will be modernized under one model. The goal is to provide investors with more transparent, relevant and useful information. “When we talk about software costs I think a lot of people’s minds go to the internal cost that you develop—your own [enterprise resource planning] or systems or hiring a third-party,” FASB Vice Chair James Kroeker said on September 22. “But when we say ‘all software costs,’ I think the scope of this literally is all.” His remarks were part of a Private Company Council (PCC) discussion to address potential models FASB staff have been researching to revamp recognition, measurement, presentation, and disclosure of costs to internally develop or acquire software. The 11-member PCC works with the board to amend or develop reporting rules for private companies. The topic encompasses all software costs subject to the guidance in ASC 350-40, “Intangibles—Goodwill and Other—Internal-Use Software,” and ASC 985-20, “Software—Costs of Software to Be Sold, Leased, or Marketed,” for all entities. If the project takes shape as planned, companies will no longer have to distinguish between two sets of guidance.

 

PCC Wants Private Companies under New Crypto Accounting Rules

Private Company Council (PCC) Chair Candace Wright said that the new accounting rules FASB is developing for cryptocurrencies should be applicable to both public and private companies “since there is no guidance.” Wright, a director with Postlethwaite & Netterville, a Louisiana-based accounting and business advisory firm, told board members on Sept. 22, 2022, that she supported “including the private companies as you move forward with this [project].” Her remarks piggybacked on questions raised by other PCC members about how broad a reach the crypto rules would have. In early September, FASB decided to limit rules it plans to develop to cryptocurrencies that are fungible, deemed intangible, reside on a blockchain or distributed ledger, secured through cryptography, and do not meet the definition of a contract. “It is a pretty narrow scope so there will be a number of crypto assets that could be outside of the scope but that’s because those crypto assets may very well be financial assets,” a FASB staff member explained. “There are a number of crypto assets that we are observing that give you rights to goods or services from a counterparty,” he said. “So it’s hard to really understand exactly what the percentage is or populations are, but we’re seeing the evolution of having these crypto assets be more akin to traditional assets that already have current accounting. What we’ve described here we think is the stuff that falls out of what is traditionally accounted for.”

 

PCAOB News

Staff Seeks Comment on Use of Interim Attestation Standards

The PCAOB has issued a staff request for comment on the use of its interim attestation standards. The feedback will help inform the board’s work to update the standards. When the PCAOB was established almost 20 years ago, the board adopted AICPA standards on a temporary basis, and many of the interim standards are still being used today. The board’s new leadership has made it a priority to modernize its standards. “The world has changed since 2003, so to ensure investors are protected, our standards must adapt to keep up,” said PCAOB Chair Erica Williams in a statement. “We urge the public to provide our staff with input on how we can best bring our attestation standards up to date.” Attestation standards include examination, review and agreed-upon procedures (AUP) engagements. Comments are due to the PCAOB by October 26.

Company The CPA Journal
Category FREE CONTENT;ARTICLE / WHITEPAPER
Intended Audience CPA - small firm
CPA - medium firm
CPA - large firm
Published Date 09/29/2022

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The CPA Journal is known as the “Voice of the Profession,” and is The New York State Society of CPA’s monthly flagship publication and top member resource. An award-winning magazine and finalist for excellence in journalism (2018, 2017 FOLIO magazine awards), The Journal has over 95% nationally focused content written by thought leaders in the accounting and finance industry.

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