Happy New Year! We are pleased to release MaloneBailey's January 2022 issue of The Crunch. This special edition of The Crunch highlights FASB updates that are going into effect in 2022 as well as a review of the FASB updates that went into effect in 2021. 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 www.malonebailey.com

What's the Crunch?  Featured Podcast Taxpayers to Watch Out for Net Operating Loss and Business Loss Limitations Recent Accounting & Regulatory Updates  FASB: What You Need to Know for 2022 Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Financial Services-Insurance (Topic 944): Effective Date and Early Application Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance Leases (Topic 842): Discount Rate for Lessees That Are Not Public Business Entities Compensation—Stock Compensation (Topic 718): Determining the Current Price of an Underlying Share for Equity-Classified Share-Based Awards Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity FASB: A Review of 2021 Updates Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets Reference Rate Reform (Topic 848): Scope Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762  Codification Improvements Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815  Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans Financial Services —Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts  Extra Crunch Securities and Exchange Commission's 'Office Hours' with Gary Gensler, Chairman of the SEC About MaloneBailey, LLP

Featured Podcast

Taxpayers to Watch Out for Net Operating Loss and Business Loss Limitations Summary - Starting in 2021, it was possible that taxpayers might not be able to fully offset their taxable income using their net operating Loss (NOL) carryover and excess business losses due to the expiration of several favorable tax rules under the CAREs Act. In this month's featured podcast, Chuqiao Peng, Tax Senior at MaloneBailey, LLP, speaks with Caroline Rosen from MaloneBailey's marketing department about how important it is for taxpayers to understand their 2021 estimated tax liabilities under the new rules by the 2021 Q4 estimated tax deadline.  Simply click on the image below to listen to the podcast. For this podcast and many more, please visit the Resources section of our website.

FASB: What You Need to Know for 2022

Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Summary - This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022. For all other entities they are effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Entities should apply the amendments prospectively to business combinations that occur after the effective date. Early adoption is permitted, including in any interim period, for Public business entities for periods for which financial statements have not yet been issued, and for all other entities for periods for which financial statements have not yet been made available for issuance. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Financial Services-Insurance (Topic 944): Effective Date and Early Application Summary - This ASU allows the delayed adoption date of ASU No. 2018-12, as noted in the "Effective Date" information at the left. And allows insurance companies to restate only one previous period, rather than two, if they choose to early adopt LDTI. The amendments permit the delay of the implementation of ASU No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI), by one year as follows: For SEC filers, excluding smaller reporting companies as defined by the SEC, LDTI is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. For all other entities, LDTI is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. Early adoption is permitted. If early adoption is elected, the transition date is either the beginning of the prior period presented or the beginning of the earliest period presented. If early application is not elected, the transition date is the beginning of the earliest period presented. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance Summary - These amendments are expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types of government assistance they receive. The amendments require the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy to other accounting guidance such as a grant model within FASB Accounting Standards Codification® Topic 958, Not-for-Profit Entities, or International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance: Information about the nature of the transactions and the related accounting policy used to account for the transactions; The line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item; and Significant terms and conditions of the transactions, including commitments and contingencies. ASU No. 2021-10 is effective for financial statements issued for annual periods beginning after December 15, 2021 for all entities except not-for-profit entities and employee benefit plans within the scope of Topics 960, 962, and 965 on plan accounting. Early adoption is permitted. ASU No. 2021-10 should be applied:  Prospectively to all transactions within the scope of ASU No. 2021-10 that are reflected in financial statements at the date of initial application and to new transactions that are entered into after the date of initial application Retrospectively.    For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Leases (Topic 842): Discount Rate for Lessees That Are Not Public Business Entities Summary - Topic 842 currently provides lessees that are not public business entities with a practical expedient that allows them to make an accounting policy election to use a risk-free rate as the discount rate for all leases. The FASB originally provided this practical expedient to relieve those lessees from the cost and complexity of having to calculate an incremental borrowing rate. Some private company stakeholders noted that a risk-free rate is low compared with their expected average incremental borrowing rates, and that using the risk-free rate election could increase an entity’s lease liabilities and right-of-use assets. To address these concerns, the amendments in the ASU allow lessees that are not public business entities to make the risk-free rate election by class of underlying asset, rather than at the entity-wide level. It also requires that, when the rate implicit in the lease is readily determinable for any individual lease, a lessee use that rate (rather than a risk-free rate or an incremental borrowing rate), regardless of whether it has made the risk-free rate election. An entity that has not yet adopted Topic 842 as of November 11, 2021, should apply ASU No. 2021-09 to all new and existing leases when the entity first applies Topic 842. An entity that has adopted Topic 842 as of November 11, 2021, should apply ASU No. 2021-09 for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Earlier application is permitted as of the beginning of the fiscal year of adoption. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Compensation—Stock Compensation (Topic 718): Determining the Current Price of an Underlying Share for Equity-Classified Share-Based Awards Summary - This ASU provides private companies the option to elect a practical expedient to determine the current price input of equity-classified share-based awards issued as compensation using the reasonable application of a reasonable valuation method. The characteristics of this method are the same as the characteristics used in the regulations of the U.S. Department of the Treasury related to Section 409A of the U.S. Internal Revenue Code (the Treasury Regulations) to describe the reasonable application of a reasonable valuation method for income tax purposes. The amendments are effective prospectively for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption, including application in an interim period, is permitted for financial statements that have not been issued or made available for issuance as of October 25, 2021. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments Summary - 'This ASU amends the lease classification requirements for lessors to align them with practice under ASC Topic 840. Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if both of the following criteria are met: The lease would have been classified as a sales-type lease or a direct financing lease in accordance with the classification criteria in ASC paragraphs 842-10-25-2 through 25-3; and The lessor would have otherwise recognized a day-one loss. When a lease is classified as operating, the lessor does not recognize a net investment in the lease, does not derecognize the underlying asset, and, therefore, does not recognize a selling profit or loss. An entity that has not yet adopted ASU No. 2016-02 as of July 19, 2021, should apply ASU No. 2021-05 when it first applies ASU No. 2016-02 and should apply the same transition method elected for ASU No. 2016-02. An entity within the scope of ASC paragraph 842-10-65-1(a) that has adopted ASU No. 2016-02 as of July 19, 2021, should apply ASU No. 2021-05 for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Earlier application is permitted. An entity within the scope of ASC paragraph 842-10-65-1(b) that has adopted ASU No. 2016-02 as of July 19, 2021, should apply ASU No. 2021-05 for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Earlier application is permitted. See a discussion of the transition methods available in ASU No. 2021-05. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options Summary - This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses: (1) How an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; (2) How an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) How an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. The amendments are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt the amendments in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period.   For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Summary - This ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. ASU No. 2020-06 is effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the standard will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption will be permitted. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

FASB: A Review of 2021 Updates

Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants. Summary - This ASU amends the SEC sections of the Codification related to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.  This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No. 33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities Summary - This ASU permits private companies and not-for-profit organizations that have not yet applied the revenue recognition standard to do so for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020. For leases, the ASU provides an effective date deferral to private companies, private not-for-profit organizations, and public not-for-profit organizations that have not yet issued (or made available) their financial statements reflecting the adoption of the guidance. It is intended to provide near-term relief for certain entities for whom the leases adoption is imminent. Under the ASU, private companies and private not-for-profit organizations may apply the new leases standard for fiscal years beginning after December 15, 2021, and to interim periods within fiscal years beginning after December 15, 2022. Public not-for-profit organizations that have not yet issued (or made available to issue) financial statements reflecting the adoption of the leases guidance may apply the standard for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The standard is effective immediately. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842) Summary - This ASU adds an SEC paragraph pursuant to the issuance of SEC Staff Accounting Bulletin No. 119 on loan losses to the FASB Codification Topic 326. This ASU also updates the SEC section of the Codification for the change in the effective date of Topic 842. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets Summary - This ASU requires a not-for-profit organization to present contributed nonfinancial assets as a separate line item in the statement of activities, apart from contributions of cash or other financial assets. It also requires a not-for-profit to disclose:   a) Contributed nonfinancial assets recognized within the statement of activities disaggregated by category that depicts the type of contributed nonfinancial assets; and b) For each category of contributed nonfinancial assets recognized (as identified in (a)): Qualitative information about whether the contributed nonfinancial assets were either monetized or utilized during the reporting period. If utilized, a description of the programs or other activities in which those assets were used. The not-for-profit’s policy (if any) about monetizing rather than utilizing contributed nonfinancial assets. A description of any donor-imposed restrictions associated with the contributed nonfinancial assets. The valuation techniques and inputs used to arrive at a fair value measure, in accordance with the requirements in Topic 820, Fair Value Measurement, at initial recognition.  The principal market (or most advantageous market) used to arrive at a fair value measure if it is a market in which the recipient NFP is prohibited by a donor-imposed restriction from selling or using the contributed nonfinancial assets.  ASU No. 2020-07 is effective retrospectively for annual reporting periods beginning after June 15, 2021, and interim periods with annual reporting periods beginning after June 15, 2022. Early adoption is permitted. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Reference Rate Reform (Topic 848): Scope Summary - This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition.  An entity may elect to apply ASU No. 2021-01 on contract modifications that change the interest rate used for margining, discounting, or contract price alignment retrospectively as of any date from the beginning of the interim period that includes March 12, 2020, or prospectively to new modifications from any date within the interim period that includes or is subsequent to January 7, 2021, up to the date that financial statements are available to be issued.  An entity may elect to apply ASU No. 2021-01 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020, and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020.  For more information, click here. © 2021 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Debt (Topic 470) Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762  Summary - This ASU amends and supersedes various SEC paragraphs to reflect SEC Release No. 33-10762, which includes amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees. These SEC changes are intended to both improve the quality of disclosure and increase the likelihood that issuers will conduct debt offerings on a registered basis. The final rules are effective on January 4, 2021. Voluntary compliance with the final amendments in advance of January 4, 2021, will be permitted. After voluntary compliance subsequent Exchange Act or Regulation A periodic reports must comply with the final rules.  For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Codification Improvements Summary - This ASU affects a wide variety of Topics in the Codification. They apply to all reporting entities within the scope of the affected accounting guidance. More specifically, this ASU, among other things, contains amendments that improve the consistency of the Codification by including all disclosure guidance in the appropriate Disclosure Section (Section 50). Many of the amendments arose because the FASB provided an option to give certain information either on the face of the financial statements or in the notes to financial statements and that option only was included in the Other Presentation Matters Section (Section 45) of the Codification. The option to disclose information in the notes to financial statements should have been codified in the Disclosure Section as well as the Other Presentation Matters Section (or other Section of the Codification in which the option to disclose in the notes to financial statements appears). Those amendments are not expected to change current practice.  The amendments are effective for annual periods beginning after December 15, 2020, for public business entities. For all other entities, the amendments are effective for annual periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. Early application of the amendments is permitted for and varies based on the entity. The amendments should be applied retrospectively and at the beginning of the period that includes the adoption date. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs Summary - This ASU clarifies that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. 'ASU No. 2020-08 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is not permitted. For all other entities, ASU No. 2020-08 is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application is permitted for all other entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. All entities should apply ASU No. 2020-08 on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815  Summary - This ASU among other things clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The new ASU clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. ASU No. 2020-01 is effective For public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, ASU No. 2020-01 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early application is permitted, including early adoption in an interim period for: 1. Public business entities for periods for which financial statements have not yet been issued, and2. All other entities for periods for which financial statements have not yet been made available for issuance. An entity should apply ASU No. 2020-01 prospectively at the beginning of the interim period that includes the adoption date. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Summary - This ASU removes specific exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles (GAAP). It eliminates the need for an organization to analyze whether the following apply in a given period: Exception to the incremental approach for intraperiod tax allocation; Exceptions to accounting for basis differences when there are ownership changes in foreign investments; and Exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses.  The ASU also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for:  Franchise taxes that are partially based on income; Transactions with a government that result in a step up in the tax basis of goodwill; Separate financial statements of legal entities that are not subject to tax; and Enacted changes in tax laws in interim periods.  ASU No. 2019-12 is effective as for public business entities, for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted for Public business entities for periods for which financial statements have not yet been issued. And all other entities for periods for which financial statements have not yet been made available for issuance. An entity that elects early adoption in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption should adopt all the amendments in the same period. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans Summary - These amendments The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Disclosure Requirements Deleted The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year. The amount and timing of plan assets expected to be returned to the employer. The disclosures related to the June 2001 amendments to the Japanese Welfare Pension Insurance Law. Related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan. For nonpublic entities, the reconciliation of the opening balances to the closing balances of plan assets measured on a recurring basis in Level 3 of the fair value hierarchy. However, nonpublic entities will be required to disclose separately the amounts of transfers into and out of Level 3 of the fair value hierarchy and purchases of Level 3 plan assets. For public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits. Disclosure Requirements Added: The weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates An explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715-20-50-3, which state that the following information for defined benefit pension plans should be disclosed: The projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets. The accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. For public business entities, the amendments are effective for fiscal years ending after December 15, 2020. For all other entities the amendments are effective for fiscal years ending after December 15, 2021. Early adoption is permitted For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Financial Services —Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts  Summary -These amendments: Require updated assumptions for liability measurement. Assumptions used to measure the liability for traditional insurance contracts, which are typically determined at contract inception, will now be reviewed, and, if there is a change, updated, at least annually, with the effect recorded in net income; Standardizes the liability discount rate. The liability discount rate will be a standardized, market-observable discount rate (upper-medium grade fixed-income instrument yield), with the effect of rate changes recorded in other comprehensive income; Provide greater consistency in measurement of market risk benefits. The two previous measurement models have been reduced to one measurement model (fair value), resulting in greater uniformity across similar market-based benefits and better alignment with the fair value measurement of derivatives used to hedge capital market risk;  Simplify amortization of deferred acquisition costs. Previous earnings-based amortization methods have been replaced with a more level amortization basis; and Require enhanced disclosures. They include rollforwards and information about significant assumptions and the effects of changes in those assumptions.  For public business entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application is permitted. For more information, click here. © 2022 CCH Incorporated and/or its affiliates. All rights reserved. Used with permission.

Extra Crunch

SEC's Video Resource: Office Hours with Gary Gensler Summary - The Securities and Exchange Commission (SEC) offers an informative video resource known as 'Office Hours with Gary Gensler.' Gensler was sworn in as the 33rd Chair of the U.S. Securities and Exchange Commission on April 17, 2021. 'Office Hours with Gary Gensler' is a relatively new video resource housed on the SEC website that provides information and insight on a variety of topics including SPACs, universal proxy cards in contested director elections, the basics of investing and more. The videos are narrated by Gensler and just a few minutes long. To view these videos and more, please visit: https://www.sec.gov/news/sec-videos

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