We are pleased to release MaloneBailey's June 2019 issue of The Crunch, our newsletter highlighting recent accounting, regulatory and tax updates. Please note that the updates provided in this newsletter are not a comprehensive list.  We encourage you to visit the  SEC ,  FASB   and  IRS   websites for more information as well as a complete list of updated rules, regulations and proposals.  We invite you to   contact us   should you have any questions about the information provided in this issue.  Please visit our website to review   archived versions   of this newsletter containing past accounting, regulatory and tax updates.

The MaloneBailey Team
What's the Crunch?

Featured Podcast

  • We LOVE Houston

Accounting and Regulatory Updates

Recent FASB Updates & Proposals

  • Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments - FASB ASU 2019-04
  • Not-for-Profit Entities (Topic 958) - Updating the Definition of Collections - FASB ASU 2019-03
  • FASB Discusses Extending Private Company Alternatives for Intangible Assets and Goodwill

Recent SEC Updates & Proposals

  • Encouraging Smaller Entrants to Our Capital Markets - Remarks at SEC Speaks by Commissioner Elad L. Roisman
  • Secret Garden - Remarks at SEC Speaks by Commissioner Hester M. Peirce
  • Management's Discussion and Analysis of the SEC - Remarks at "SEC Speaks" Conference by Chairman Jay Clayton
  • Important Issues for Investors in 2019 by Rick Fleming, Investor Advocate

Tax Updates

  • 2019 Post-Season Filing Update

Extra Crunch

  • 2019 Annual Risk Monitoring and Examination Priorities Letter
  • Walk this Way - New NYSE Video Series

About MaloneBailey, LLP
Featured Podcast
Our featured podcast for June 2019 is one we have shared before, but we thought deserves the spotlight again. The U.S. Census Bureau recently released it's five year American Community Survey for 2012-2017, which showed that Houston has topped the charts and welcomed a net of 15,000 young adults, ages 25 to 34, a year. With so many people moving to Houston, we thought we'd share our thoughts on why we LOVE Houston! We discuss comparisons between Houston and other cities, the culture of Houston and many other exciting facts. As the fourth largest city in the United States, Houston is bustling with opportunity and has so much to offer.

Simply click the podcast image below to listen to our podcast on why we LOVE Houston!
Recent FASB Updates & Proposals
Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments - FASB ASU 2019-04

Summary -   The FASB has issued Accounting Standards Update (ASU) No. 2019-04,  Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , that clarifies and improves areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement.

“Since issuing the financial instruments standards, including credit losses and derivatives and hedging, the FASB staff has been working with stakeholders to obtain feedback and address questions on the guidance,” stated FASB Chairman Russell G. Golden. “Through these interactions, the FASB identified areas of the guidance that require clarification and correction. The amendments in the ASU address those areas.”

The topics included in this ASU are:

  • Topic 1: Codification Improvements Resulting from the June 11, 2018 and November 1, 2018 Credit Losses Transition Resource Group (TRG) Meetings;
  • Topic 2: Codification Improvements to ASU No. 2016-13;
  • Topic 3: Codification Improvements to ASU No. 2017-12 and Other Hedging Items;
  • Topic 4: Codification Improvements to ASU No. 2016-01; and
  • Topic 5: Codification Improvements Resulting from the November 1, 2018 Credit Losses TRG Meeting.

The ASU is part of the FASB’s ongoing agenda project focused on improving the  FASB Accounting Standards Codification ® and correcting its unintended application.

For more information, click here .

© 2019 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
Not-for-Profit Entities (Topic 958) - Updating the Definition of Collections - FASB ASU 2019-03

Summary -  The FASB has issued Accounting Standards Update (ASU) No.   2019-03 , Not-for-Profit Entities (Topic 958): Updating the Definition of Collections.

These amendments modify the definition of the term collections and require that a collection-holding entity disclose its policy for the use of proceeds from when collection items are deaccessioned (i.e., removed from a collection). If a collection-holding entity has a policy that allows proceeds from deaccessioned collection items to be used for direct care, it should disclose its definition of direct care.

The amendments apply to all entities, including business entities, that maintain collections. However, accounting for collections is primarily an issue for certain not-for-profit (NFP) entities because collections often are held by museums; botanical gardens; libraries; aquariums; arboretums; historic sites; planetariums; zoos; art galleries; nature, science, and technology centers; and similar educational, research, and public service organizations that have those divisions.

The amendments are effective for annual financial statements issued for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. Early application of the amendments is permitted. The amendments should be applied on a prospective basis.

For more information, click here .

© 2019 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
FASB Discusses Extending Private Company Alternatives for Intangible Assets and Goodwill

Summary - As discussed in its “Summary of Board Decisions” publication, the FASB met on April 10, 2019, and discussed comment letter and other stakeholder feedback and redeliberated the proposed ASU, Intangibles—Goodwill and Other (Topic 350), Business Combinations (Topic 805), and Not-for-Profit Entities (Topic 958): Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities .

The Board decided to permit a not-for-profit entity (NFP) to elect the accounting alternatives described in ASU No. 2014-02, Intangibles—Goodwill and Other (Topic 350): Accounting for Goodwill , and No. 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination . The FASB decided to extend the Topic 805 alternative without modifications and decided to permit an NFP conduit bond obligor to elect the same accounting alternatives.

Consistent with the current requirement for NFPs to present expenses by both nature and function, the FASB decided that an NFP is required to functionalize goodwill amortization. The FASB also decided the guidance on functionalizing goodwill amortization is sufficient.

The FASB considered comments raised by comment letter respondents concerning the presentation in health care organization financial statements, the amortization period, and the application of the alternatives in specific financial structures. The FASB decided the current guidance is sufficient for these areas.

The FASB also decided that an NFP should apply the transition guidance in the private company accounting alternatives, which requires prospective application for new goodwill recognized, prospective amortization of existing goodwill, and prospective application for newly acquired eligible identifiable intangible assets. The FASB decided NFPs should not subsume existing customer-related intangible assets and noncompete agreements into goodwill upon adoption of the accounting alternative.

The FASB decided not to specify an effective date; thus, NFPs electing to adopt these alternatives would not have to demonstrate preferability and would follow the transition guidance above the first time they elect to adopt the alternatives.

The FASB directed its staff to draft a final ASU for vote by written ballot.

For more information, click here .

© 2019 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
Recent SEC Updates & Proposals
Encouraging Smaller Entrants to Our Capital Markets - Remarks at SEC Speaks by Commissioner Elad L. Roisman

Summary - SEC Commissioner Elad L. Roisman recently discussed capital formation and smaller entrants into the US capital markets. Topics discussed by Roisman included:

  • Road blocks for small public companies;
  • The SEC’s role in capital formation; and
  • Proposed SEC actions.

For more information, click here .

© 2019 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
Secret Garden - Remarks at SEC Speaks by Commissioner Hester M. Peirce

Summary  - SEC Commissioner Hester Peirce recently discussed the securities regulation landscape. Peirce indicated that the “complexity of the federal securities laws is no secret. Indeed, this complexity is likely a big reason most of us are in the room today. We are drawn to this body of law because it promises a lifetime of interesting problems to solve. We will never get bored; there is always something new and unexpected to be discovered. We constantly challenge one another with legal questions the answers to which reside in a tangled statutory and regulatory web.”

For more information, click here .

© 2019 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
Management's Discussion and Analysis of the SEC - Remarks at the "SEC Speaks" Conference by Chairman Jay Clayton

Summary  - SEC Chairman Jay Clayton recently discussed the current state of the SEC with an emphasis on current staff resources. Clayton discussed:

  • Factors and trends affecting SEC operations;
  • Fiscal results and expenditures;
  • Rulemaking agenda; and
  • Economic analysis and retrospective review of commission rules.

For more information, click here .

© 2019 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
Important Issues for Investors in 2019 by Rick Fleming, Investor Advocate

Summary  - SEC Investor Advocate Rick Fleming recently discussed important investor issues for 2019. Important issues for 2019 include:

  • Transaction fee and pilot program;
  • Amendments to Rule 15c2-11 to defer fraud against retail investors;
  • Improvements to equity market structure; and
  • Regulation of proxy advisors.

For more information, click here .

© 2019 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.
Tax Updates
2019 Post-Season Filing Update

Summary - Wolters Kluwer Tax & Accounting has published its post-season tax briefing which highlights major tax law developments, including the introduction of Safe Harbor on the 100% bonus depreciation caps on luxury cars, and proposed regulations for deduction on FDII and GILTI. 

To view the complete tax briefing, please click here .
Extra Crunch
2019 Annual Risk Monitoring and Examinations Priorities Letter  

Each year, FINRA publishes its Annual Risk Monitoring and Examination Priorities Letter to highlight issues of importance to FINRA’s regulatory programs. This letter describes topics that member firms should consider as they identify opportunities to improve their compliance, supervisory and risk management programs. This year's letter focuses primarily on topics that will be materially new areas of emphasis for FINRA's risk monitoring and examination programs in the coming year.

For more information and to view the letter, please click here .

Source: FINRA
Walk this Way - New NYSE Video Series

As part of NYSE’s recently released Insights content platform, Walk This Way is a series of videos that aims to show viewers behind the scenes of the most fascinating workplaces. The 10-part series is “a digital-first program that features CEOs of well-known companies taking viewers through their workspaces, giving them a first-person look at how they’re literally building for the future,” according to their website. The new program plans to follow business leaders such as GoDaddy Inc. CEO, Scott Wagner and Casper CEO, Philip Krim and will be distributed to viewers via the NYSE’s network of more than three million followers on Twitter, Instagram, Facebook and LinkedIn. 

For more information and to view the video series, please click here .
About MaloneBailey, LLP
Should you be interested in a complimentary estimate for audit, tax or consulting services, please contact Caroline Rosen at crosen@malonebailey.com or 713.343.4286.
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