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experience direction //
CPAs & ADVISORS
NATIONAL FINANCIAL SERVICES GROUPMatthew P. Stout, CPAChad M. Garber, CPA
ASU 2014-02
Intangibles-Goodwill and Other (Topic 350): Accounting for Goodwill (a consensus of the Private Company Council)
What changed???A Credit Union can elect to begin amortizing goodwill The election to amortize vs. carry gross is optional
Effective for annual periods after December 15, 2014. Why would I want to amortize???
Don’t want to carry the goodwill on the balance sheet foreverDon’t want the obligation to evaluate for impairment each year into eternity
2 // experience direction
ASU 2014-04
Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure
What changed???FASB attempted to eliminate diversity in practice on foreclosure recognition
“In-substance Foreclosure”Two criteria to meet the threshold for repossession:
The creditor has obtained legal title to residential real estate upon completion of a foreclsoureThe borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar agreement
3 // experience direction
ASU 2014-04 (CONTINUED)
Disclosure requirements:The amount of foreclosed residential real estate property held by the creditorThe recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable juridictions
Effective DateAnnual periods ending after December 31, 2015. Early adoption is permitted beginning after December 15, 2014.
How will this impact me???It really shouldn’tThe second disclosure item is new, but should be readily available
4 // experience direction
ASU 2014-09
Revenue from Contracts with Customers (Topic 606)Effective Date for Credit Unions
Annual reporting periods beginning on or after December 15, 2017May adopt one year earlier when public companies must adopt
Who is impacted???All entities that enter into contracts with customers
Public, private, not-for-profitRegardless of industry
Exceptions cited by the standard:Lease contractsInsurance contractsFinancial instrumentsCertain guarantees (other than product warranties)Certain nonmonetary exchanges
5 // experience direction
ASU 2014-09 (CONTINUED)
What changed for me???Depository and Lending Institutions Revenue Recognition Task Force Established
Charged with developing revenue recognition implementation issues that will provide helpful hints and illustrative examples for how to apply the new Revenue Recognition Standard10 issues identified to dateThe list will be updated as the task force continues its discussions
Potential Areas of Impact for Credit UnionsCredit card reward programsInterchange incomeSale of real estate, gain recognition
6 // experience direction
ASU 2014-14
Troubled Debt Restructurings by Creditors: Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure
What Changed???Requires that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met:
The loan has a government guarantee that is not separable from the loan before foreclosureAt the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claimAt the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed
Effective DateAnnual periods ending after December 15, 2015
7 // experience direction
PROPOSED ASU
LeasesWhat is changing
Eliminates the concept of an operating lease for any lease greater than 12 months
When is the standard comingEstimated to be final in Q4 2015
CECLWhat is changing
The allowance will become a forward-looking model (Expected vs. Incurred)
When is the standard comingEstimated to be final is Q3 or Q4 2015Effective date is expected to be 2018???
8 // experience direction
BKD THOUGHTWARE
Webinarshttp://www.bkd.com/webinars/fs/
Articleshttp://www.bkd.com/articles/industry/fs/
Several of the topics from today are discussed in more detail and delivered by smarter people!!!
9 // experience direction
THANK YOU
FOR MORE INFORMATION // For a complete list of our offices and subsidiaries, visit bkd.com or contact:
Matthew P. Stout, CPA // [email protected] // 260.460.4000
Chad M. Garber, CPA // [email protected] // 317.383.4000