Alternative Investment Industry Technical Update

We are pleased to share this Technical Update on recent changes impacting the alternative investment industry. This month you will find a brief summary of the following:

FASB:
  • No. 2017-01 Business Combinations (Topic 805)
    • The amendments in this Update provide a screen to determine when a set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar assets, the set is not a business.
    • The intention is to more closely align the practice of US GAAP with regard to definition of business with that of IFRS 3.
    • Public business entities should apply the amendments prospectively in this Update to annual periods beginning after December 15, 2017 and a year later for other entities.
    • Click here to read this FASB Update.
  • No. 2017-04 Intangible – Goodwill and Other (Topic 350)
    • Under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.
    • An entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable.
    • This will more closely align US GAAP with IFRS.
    • Click here to read this FASB Update.
PCAOB:
  • Provides Guidance for Firms Filing the New Form AP
    • The new rules include assigning engagement partner identification numbers and estimating audit hours when disclosing the participation of other accounting firms, among other things.
    • Firms may submit an individual Form AP using a web form or may submit multiple forms at once using XML.
    • This is effective for public company audit reports issued on or after January 31, 2017 for engagement partner names and June 30, 2017 for other accounting firms that participated in the audit.
    • Click here to read more about this new PCAOB guidance.
CFTC:
  • Unanimously Approves Proposal to Amend Recordkeeping Requirements
    • The proposed amendments would modernize and make technology-neutral the form and manner in which regulatory records must be kept, as well as rationalize the rule text for ease of understanding.
    • Click here to read about the CFTC proposal.
  • Unanimously Approves Proposals on Swaps Data and Other Amendments
  • Issues New Advisories on Cooperation
    • The new issuances further incentivize individuals and companies to cooperate fully and truthfully in CFTC investigations and enforcement actions, including by providing high quality cooperation, self-reporting to the Enforcement Division, and providing early and material assistance to the Division.
    • Click here to read more about these new advisories.
AICPA:
  • Recommends the Feds to Implement Cybersecurity Risk Management
    • The association has provided comments on Federal agencies’ advance notice of proposed rulemaking (ANPR) regarding enhanced cyber risk management standards for large and interconnected entities and their service providers.
    • Click here to read the press release.
U.S. Treasury:
  • Issues a flurry of regulations that are up for review
    • They addressed reporting for foreign owned disregarded entities, dividend equivalent regulations, and further clarity on entity level audits. However, the status of these regulations is uncertain based on a recent memorandum from the Trump administration, requiring a review of all pending regulations in addition to President Trump’s Executive Order requiring that two regulations be repealed for each new regulation that is promulgated.

We welcome your suggestions for future topics that you would like to see included in this Technical Update. Also, for further information regarding these updates and how you may be affected by these changes, please contact your Arthur Bell representative at 855-787-0001 or via email at contactus@arthurbellcpas.com.

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