Financial Reporting and Regulatory Update

The quarterly Financial Reporting and Regulatory Update is prepared by the Financial Education & Research Foundation (FERF) in collaboration with Crowe LLP, highlighting pronouncements from the U.S. SEC, FASB, PCAOB, and other regulators and standard-setters. Each update includes ASU Effective Date Checklists for Public and Non-Public Business Entities.

Fourth Quarter 2022

Financial Reporting & Regulatory Update, Fourth Quarter 2022

During the fourth quarter of the 2022 calendar year, the Financial Accounting Standards Board (FASB) issued three new accounting standards updates (ASUs) addressing the following topics: 

  • Disclosure of supplier finance program obligations 
  • Transition for sold contracts 
  • Deferral of the sunset date for reference rate reform 

The Emerging Issues Task Force (EITF) reached a final consensus to expand use of the proportional amortization method of accounting to more income tax credit programs. The next step is for the FASB to consider whether to proceed with issuing a final standard.

The FASB also issued three new proposals: one on improvements to reportable segment disclosures, one on recognition and initial measurement of joint venture formations, and one on common control arrangements in leases. The board also issued proposed statements of financial concept on the conceptual framework for reporting entity and recognition and derecognition. 

The Securities and Exchange Commission (SEC): 

  • Participated in the annual American Institute of CPAs (AICPA) and Chartered Institute of Management Accountants (CIMA) Conference on Current SEC and Public Company Accounting Oversight Board (PCAOB) Developments 
  • Published its five-year strategic plan 
  • Remarked on environmental, social, and governance (ESG) disclosures; quality ESG and climate-related data; enforcement; competition; diversity, equity, and inclusion (DE&I); auditor’s responsibility for fraud detection; and digital asset financial stability risks and regulation 
  • Adopted new disclosure rules on insider trading, proxy voting records, compensation recovery listing standards and disclosure, fund shareholder report and advertising, broker-dealer securities-based swaps, and pay-versus-performance 
  • Issued a sample letter on crypto assets 
  • Reopened several comment periods 
  • Proposed a regulation from the Division of Trading and Markets, changes to open-end fund liquidity framework, and new oversight requirements for outsourced services by investment advisers 

The PCAOB approved its five-year strategic plan, issued post-implementation reports on estimates and specialists and the impact of critical audit matters (CAMs) reporting, proposed a new quality control standard, issued a preview of 2021 inspection observations, and participated in the AICPA-CIMA conference.  

The Center for Audit Quality (CAQ) published its audit committee transparency barometer report and issued an analysis of S&P 500 ESG reporting.  

In addition to these highlights from the quarter, we have included recent developments from the Governmental Accounting Standards Board (GASB). 

Checklists for the effective dates of FASB ASUs and GASB statements are provided in the appendix.