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Financial Reporting and Regulatory Update

Second Quarter 2019

ASU effective dates for nonpublic business entities (non-PBEs)

Non-Public Business Entities (Non-PBEs)

Accounting Standards Update (ASU)

Effective dates for Dec. 31 year-end non-PBEs

Early adoption

Codification Improvements (ASU 2018-09)

Contains 30 improvements in all, including income taxes for certain quasi reorganizations, fair value option debt extinguishments, financial instruments, excess tax benefits, tax allocation methods, offsetting derivative assets and liabilities, transfer restrictions for fair value measurement, balance sheet offsetting for broker-dealers, and valuation for a stable value common collective trust fund.

Varies by issue (see pages 8 and 9 of the ASU)

Upon issuance, July 16, 2018

Dec. 31, 2019

Dec. 31, 2020
Permitted, including in an interim period

Certain Deferred Taxes for Steamship Entities (ASU 2017-15)

Requires steamship entities to recognize any remaining deferred taxes on certain statutory reserve deposits in accordance with Topic 740.
March 31, 2019 Permitted, including in an interim period

Tax Reform – Reclassification of Stranded Tax Effects in AOCI (ASU 2018-02)

An entity may elect to reclassify stranded tax effects in AOCI specifically affected by the Tax Cuts and Jobs Act from AOCI to retained earnings, instead of recognizing those effects in earnings.
March 31, 2019 Permitted, including in an interim period

Extending Private Company Accounting Alternatives on Goodwill and Certain Identifiable Intangible Assets to Not-for-Profit Entities (ASU 2019-06)

A not-for-profit entity may elect the accounting alternatives provided to private companies for the subsequent measurement of goodwill and the recognition of certain identifiable intangible assets acquired in a business combination.
Upon issuance, May 30, 2019 Not applicable

Revenue Recognition (ASU 2014-09)

For all entities, the transaction- and industry-specific recognition methods are eliminated and revenue is recognized by applying a defined principles-based approach.

Clarifying standards:

ASU 2015-14 – Deferral of Effective Date

ASU 2016-08 – Principal Versus Agent Considerations (Gross Versus Net Reporting)

ASU 2016-10 – Identifying Performance Obligations and Licensing

ASU 2016-11 – Rescission of Certain SEC Guidance in Topic 605 (Staff Announcements at March 3, 2016, EITF Meeting)

ASU 2016-12 – Narrow-Scope Improvements and Practical Expedients

ASU 2016-20 – Technical Corrections and Improvements

ASU 2017-14 – Rescission of SEC SAB Topics 8 and 13 and

bill-and-hold guidance; revision of SAB Topic 11.A and SEC guidance for certain vaccine manufacturers
Dec. 31, 2019

Permitted only as of annual periods

beginning after Dec. 15, 2016, including interims within

Derecognition and Partial Sales of Nonfinancial Assets (ASU 2017-05)

Primarily applies to the real estate industry but can affect other entities. Clarifies the scope of Subtopic 610-20 by defining an “in substance nonfinancial asset” and provides guidance on partial sales, such as when an entity retains an equity interest in the entity that owns the transferred nonfinancial assets.

Dec. 31, 2019, consistent

with ASU 2014-09

Permitted only as of annual periods

beginning after Dec. 15, 2016, including interims within

Service Concession Arrangements for Operators of Public Infrastructure (ASU 2017-10)

In all service concession arrangements between a public sector entity and the operator of the public sector entity’s infrastructure, the public sector entity (or the grantor) should be identified as the customer.
Dec. 31, 2019 (unless ASU 2014-09 has been adopted) Permitted, including in an interim period

Recognition and Measurement (ASU 2016-01)

Applies to the classification and measurement of financial instruments. Removes the available-for-sale category for equities. Equities (excluding equity method and consolidated investments) will be carried at fair value; however, the changes will run through the income statement rather than OCI.

Clarifying standards:

ASU 2018-03 – Clarifications for equity securities without a readily determinable fair value and fair value option liabilities

ASU 2018-04 – (SAB 117) Rescission of SEC guidance on AFS equities
Dec. 31, 2019

Not permitted, except for two provisions

For ASU 2018-03,

permitted, including in an interim period, if ASU 2016-01 has been adopted

Breakage for Prepaid Cards (ASU 2016-04)

Applies to prepaid stored-value products that are redeemable for monetary values of goods or services but also may be redeemable for cash, such as certain prepaid gift cards, prepaid telecommunication cards, and traveler’s checks.
Dec. 31, 2019 Permitted, including in an interim period

Statement of Cash Flows: Certain Clarifications (ASU 2016-15)

Provides guidance on how eight specific cash flows should be   classified in the statement of cash flows, including debt prepayment or extinguishment costs, settlement of zero-coupon bonds, contingent consideration payments, insurance settlement proceeds, company- owned life insurance (COLI) policy settlements and premiums, equity method investee distributions, beneficial interests in securitization transactions, and predominance principle for receipts and payments.

Dec. 31, 2019 Permitted, including in an interim period

Income Taxes for Intra-Entity Asset Transfers (ASU 2016-16)

Applies to asset transfers between legal entities, including related parties (e.g., bank and investment subsidiary); transferor recognizes the current and deferred tax effects when the transfers occur.
Dec. 31, 2019

Permitted as of the beginning of an annual period for which financial

statements have not been issued or made available for issuance

Statement of Cash Flows: Restricted Cash (ASU 2016-18)

Requires that restricted cash and cash equivalents be presented in total cash and cash equivalents in the statement of cash flows, and the nature of restrictions on restricted cash and cash equivalents be disclosed.
Dec. 31, 2019 Permitted, including in an interim period

Definition of a Business (ASU 2017-01)

Applies to the analysis of whether an asset or business is acquired (which determines whether goodwill is recognized), as well as asset derecognition and business deconsolidation transactions.
Dec. 31, 2019 Permitted for certain transactions

Employee Benefit Plan Master Trust Reporting (ASU 2017-06)

Applies to disclosures of plans that have an interest in a master trust, which is a trust for which a regulated financial institution serves as a trustee or custodian and in which assets of more than one plan sponsored by an employer or employers under common control are held.
Dec. 31, 2019 Permitted

Presentation of Net Periodic Pension and Postretirement Benefit Costs (ASU 2017-07)

Rather than reporting pension expense as a net amount, the service cost component will be presented consistent with similar compensation for the same employees, and the other components will be separately presented in the income statement.
Dec. 31, 2019

Permitted as of the beginning of an annual period, in the first interim period

if interim financial statements are issued

Contributions Received and Made for Not-for-Profit Entities (ASU 2018-08)

Improves the guidance on contributions and exchange transactions. Although the ASU primarily affects not-for-profit entities, it applies to all entities, including business entities, that receive or make contributions of cash and other assets.

For contributions received, Dec. 31, 2019

For contributions made, Dec. 31, 2020


(ASU 2016-02)

Revises recognition and measurement for lease contracts by lessors and lessees; operating leases are recorded on the balance sheet for lessees. Replaces Topic 840 with Topic 842.

Clarifying standards:

ASU 2018-01 – Provides a practical expedient in transition to not evaluate existing or expired land easements under Topic 842 that were not previously accounted for as leases under Topic 840.

ASU 2018-10 – Provides 16 improvements and clarifications to the guidance in Topic 842.

ASU 2018-11 – Provides an optional transition method for adopting Topic 842 that will eliminate comparative period reporting under the new guidance in the adoption year. Provides a practical expedient for lessors to not separate nonlease components from the associated lease component in specified circumstances.

ASU 2018-20 – Provides improvements specific to lessors for evaluating sales taxes, recording reimbursed costs, and allocating variable payments to lease and nonlease components.

ASU 2019-01 – Provides improvements in determining fair value of underlying asset by lessors that are not manufacturers or dealers, presentation of the statement of cash flows for sales-type and direct financing leases, and transition disclosures.

Dec. 31, 2020 Permitted

Premium Amortization on Purchased Callable Debt (ASU 2017-08)

Shortens the amortization period for premiums on purchased callable debt securities to the earliest call date, instead of to the maturity date.
Dec. 31, 2020 Permitted, including in an interim period

Financial Instruments With Down-Round Features (Part I) and Scope Exception for Certain Mandatorily Redeemable Financial Instruments (Part II)

(ASU 2017-11)

Part I – Simplifies the accounting for certain financial instruments with down-round features by eliminating the requirement to consider the down-round feature in the liability or equity classification determination. For entities that present EPS, requires the effect of the down-round feature in a warrant or other freestanding equity-classified instrument to be presented as a dividend and an adjustment to EPS when it is triggered. Regardless of whether the entity presents EPS, requires the

effect of the down-round feature in a convertible instrument such as debt or preferred stock to follow existing guidance for contingent beneficial conversion features and be presented as a discount to the convertible instrument with an offsetting credit to paid-in capital when it is triggered.

Part II – Changes the indefinite deferral available to private companies with mandatorily redeemable financial instruments and certain noncontrolling interests to a scope exception, which does not have an accounting effect.
Dec. 31, 2020 Permitted, including in an interim period

Hedging Activities (ASU 2017-12)

Expands the nonfinancial and financial risk components that can qualify for hedge accounting and simplifies financial reporting for hedging activities.

Clarifying standards:

ASU 2019-04 – Provides specific improvements and clarifications to the guidance in Topic 815. Among other areas, addresses partial-term fair  value hedges of interest-rate risk, amortization and disclosure of fair value hedge basis adjustments, and consideration of hedged contractually specified interest rate under the hypothetical derivative method.

Dec. 31, 2020 Permitted, including in an interim period

Additional Benchmark Interest Rate for Hedging (ASU 2018-16)

Expands the number of benchmark interest rates that can be used in accounting hedge designations to include the Overnight Index Swap (OIS) rate based on the Secured Overnight Financing Rate (SOFR) and stems from concerns about the sustainability of the London Interbank Offered Rate (LIBOR).

Dec. 31, 2020 (consistent

with ASU 2017-12)

March 31, 2020, if ASU 2017-12 was early adopted
Permitted, including in an interim period, if ASU 2017-12 was early adopted

Nonemployee Stock Compensation Simplifications (ASU 2018-07)

Aligns the accounting guidance for nonemployee stock payments with the guidance for employee stock compensation in ASC Topic 718.
Dec. 31, 2020 Permitted, including in an interim period, but no earlier than the adoption of Topic 606

Fair Value Measurement Disclosure (ASU 2018-13)

Removes, modifies, or adds certain fair value measurement disclosures related to financial instrument transfers and Level 3 instruments, among others.
Dec. 31, 2020 Permitted
Updating the Definition of Collections
(ASU 2019-03)
Improves the definition of collections. Requires additional disclosure. Although the ASU primarily affects not-for-profits, it applies to all entities that maintain collections.
Dec. 31, 2020 Permitted, including in an interim period
Certain Costs in Media and Entertainment Industry
(ASU 2019-02)
Applies to broadcasters and entities that produce and distribute films and episodic television series. Aligns the accounting of episodic television series with films, and provides more relevant financial reporting information to users of financial statements.
March 31, 2021 Permitted, including in an interim period

Defined Benefit Plan Disclosure for Sponsors (ASU 2018-14)

Removes and clarifies certain disclosures for sponsors of defined benefit plans. Adds disclosure for weighted-average interest credit rates for certain plans, and the reasons for significant gains and losses in the benefit obligation.
Dec. 31, 2021

Implementation Costs for Cloud Computing Arrangements (CCAs) (ASU 2018-15)

Aligns accounting for implementation costs of CCAs with or without a license (that is, regardless of whether the CCA is a service contract) by capitalizing implementation costs during the application development stage and amortizing the costs over the term of the arrangement.
Dec. 31, 2021 Permitted, including in an interim period

Variable Interest Entity (VIE) Model – Targeted Improvements for Related Parties (ASU 2018-17)

Provides a private company accounting alternative not to apply VIE consolidation guidance to any arrangement with legal entities that are under common control if neither the parent nor the legal entity is a PBE (thus expanding the alternative for common control leasing arrangements to all common control arrangements). Also, revises the analysis for determining whether a decision-making fee paid by a VIE is a variable interest such that indirect interests in a VIE held through related parties in common control arrangements would be considered on a proportional basis (instead of as the equivalent to a direct interest).
Dec. 31, 2021 Permitted, including in an interim period

Collaborative Arrangements (Topic 808) (ASU 2018-18)

Requires that Topic 606 be applied to collaborative arrangements when the arrangement participant is a customer and aligns the unit-of-account guidance in Topic 808 with Topic 606. Revenue in the scope of Topic 606 should be presented separate from revenue outside its scope.
Dec. 31, 2021 Permitted, including in an interim period

Goodwill Impairment Testing (ASU 2017-04)

Removes step two – the requirement to perform a hypothetical purchase price allocation when the carrying value of a reporting unit exceeds its fair value – of the goodwill impairment test.
Tests performed on or after Jan. 1, 2022 Permitted for interim or annual goodwill impairment tests performed on testing dates on or after Jan. 1, 2017

Credit Losses (ASU 2016-13)

Replaces the incurred loss model with the CECL model for financial  assets, including trade receivables, debt securities, and loan receivables.

Clarifying standards:

ASU 2018-19 – Clarifies the effective date for non-PBEs and that impairment of operating lease receivables is in the scope of ASC Topic 842, “Leases,” and not the CECL model.

ASU 2019-04 – Provides specific improvements and clarifications to the guidance in Topic 326. Addresses accrued interest, transfers between classifications or categories for loans and debt securities, recoveries, vintage disclosures, and contractual extensions and renewal options.

ASU 2019-05 – Targeted transition relief provides an option to irrevocably elect the fair value option, on an instrument-by-instrument basis, for certain financial assets (excluding held-to-maturity debt securities) previously measured at amortized cost.

Dec. 31, 2022









For ASU 2019-04 and ASU 2019-05, Dec. 31, 2020, for

entities that have adopted ASU 2016-13; otherwise effective dates the same as ASU 2016-13
Permitted as of the fiscal years beginning after Dec. 15, 2018, including interim periods within

Long-Duration Insurance Contracts (ASU 2018-12)

Revises the accounting for life insurance and annuity contracts by eliminating the method of locking in liability assumptions and the premium deficiency test for traditional and limited-payment contracts, among other methodology changes. Requires additional disclosure.
Dec. 31, 2022 Permitted