- As the use of non-GAAP measurements in quarterly earnings calls and earnings releases has increased, regulators have become concerned that companies are using the numbers in a way that can mislead investors. A study from two independent researchers looks at the uses of non-GAAP measurements that most vexed regulators and assessed regulators’s attempts to get companies to improve their reporting practices.
- SEC Chair Mary Jo White called U.S. support of IFRS “imperative for the protection of U.S. investors and companies and the strength of our markets.” The statement was issued two weeks before she plans to step down but was intended to pave the way for her successor to resume work on an issue that has proceeded fitfully through the rulemaking process for decades.
- In an annual report to Congress for fiscal 2016, SEC Investor Advocate Rick Fleming said Congress should not weaken the rules for internal controls over financial reporting. The House of Representatives passed a bill in May 2016 to broaden the exemption from the auditor attestation requirements for internal controls at small public companies, but Fleming said that effective controls promote investor confidence and make U.S. capital markets more attractive to investors.
- The FASB’s new lease accounting standard goes into effect for public companies in 2019 and will require businesses to record on their balance sheets assets and liabilities associated with renting office space, heavy equipment, and fleets of vehicles. While most contracts considered leases today will be considered leases when the new standard comes into force, businesses will have to assess whether service contracts and other arrangements contain provisions that will meet the new definition of a lease.
- New York Department of Financial Services (NY DFS) will be releasing on Dec. 28, 2016, a revised version of the 23 NYCRR 500 Financial Services Law which outlines cybersecurity requirements.