First Quarter 2016 Standard Setter Update Financial reporting and accounting developments (current through 31 March 2016)

April 2016

First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

This First Quarter 2016 Standard Setter Update highlights significant developments in financial reporting and accounting between 1 January 2016 and 31 March 2016, except as noted. Our Standard Setter Update publications also summarize certain proposals under consideration by the Financial Accounting Standards Board (FASB), the Emerging Issues Task Force (EITF), the Private Company Council (PCC), the Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board (PCAOB), the Auditing Standards Board (ASB) and the Governmental Accounting Standards Board (GASB). For additional details on these developments, we refer you to related EY publications, many of which can be found on our AccountingLink website. We will continue to keep you informed about important developments as they occur.

April 2016

To our clients and other friends

Contents Financial Accounting Standards Board ...................................................................... 1 Securities and Exchange Commission ..................................................................... 13 Public Company Accounting Oversight Board .......................................................... 20 Auditing Standards Board ...................................................................................... 22 Governmental Accounting Standards Board ............................................................ 25 Effective date matrices .......................................................................................... 28

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Financial Accounting Standards Board

Final FASB guidance Compensation — Stock Compensation (Topic 718), Improvements to Employee Share-Based

Payment Accounting (ASU 2016-09) ................................................................................... 1 Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations

(Reporting Revenue Gross versus Net) (ASU 2016-08) ......................................................... 1 Investments — Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to

the Equity Method of Accounting (ASU 2016-07) ................................................................. 2 Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments

(a consensus of the FASB Emerging Issues Task Force) (ASU 2016-06) ................................. 2 Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing

Hedge Accounting Relationships (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-05) ................................................................................................................... 3

Liabilities — Extinguishments of Liabilities (Subtopic 405-20), Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-04) ........................................................................................................ 3

Intangibles — Goodwill and Other (Topic 350), Business Combinations (Topic 805), Consolidation (Topic 810), and Derivatives and Hedging (Topic 815), Effective Date and Transition Guidance (a consensus of the Private Company Council) (ASU 2016-03) ................. 4

Leases (Topic 842) (ASU 2016-02) ............................................................................................ 4 Financial Instruments — Overall (Subtopic 825-10), Recognition and Measurement of

Financial Assets and Financial Liabilities (ASU 2016-01) ....................................................... 5

Final guidance expected soon Revenue from Contracts with Customers (Topic 606), Identifying Performance

Obligations and Licensing .................................................................................................... 6 Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and

Practical Expedients ............................................................................................................ 6 Financial Instruments — Credit Losses (Subtopic 825-15) ............................................................ 7

FASB exposure documents Issued this quarter

Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) ................................. 8

Compensation — Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ................................................... 8

Compensation — Retirement Benefits — Defined Benefit Plans — General (Subtopic 715-20), Changes to the Disclosure Requirements for Defined Benefit Plans ........................................ 9

Other proposals previously issued .................................................................................................... 9

Pronouncements and proposals

ii First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Other FASB Revenue recognition developments .......................................................................................... 11 What’s next — agenda highlights ............................................................................................... 11

Securities and Exchange Commission

SEC final rules Security-Based Swap Transactions Connected with a Non-U.S. Person's Dealing Activity

That Are Arranged, Negotiated, or Executed By Personnel Located in a U.S. Branch or Office or in a U.S. Branch or Office of an Agent; Security-Based Swap Dealer De Minimis Exception (Release No. 34-77104) ................................................................... 13

Simplification of Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by Reference on Form S-1 for Smaller Reporting Companies (Release No. 33-10003) .................................................................................................... 13

SEC rule proposals and other releases Issued this quarter

Covered Broker-Dealer Provisions under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Release No. 34-77157) ............................................................. 15

Highlights of certain proposals previously issued Disclosure of Payments by Resource Extraction Issuers (Release No. 34-76620) ........................ 15 Request for Comment on the Effectiveness of Financial Disclosures about Entities Other

than the Registrant (Release No. 33-9929) ........................................................................ 16 Other proposals previously issued .................................................................................................. 16

Other SEC 2016 financial reporting taxonomy .......................................................................................... 18 SEC staff updates its Financial Reporting Manual guidance ........................................................ 18 NYSE MKT can offer complimentary services to newly listed issuers ........................................... 18 FPIs to provide semiannual financial information ....................................................................... 19 SEC approves 2016 PCAOB budget and accounting support fee ................................................ 19

Public Company Accounting Oversight Board

PCAOB proposed standards and other projects Highlights of certain proposals previously issued

Improving the Transparency of Audits: Rules to Require Disclosure of Certain Audit Participants on a New PCAOB Form and Related Amendments to Auditing Standards (PCAOB Release No. 2015-008) ........................................................................................ 20

Other proposals previously issued .................................................................................................. 20

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Auditing Standards Board

Final ASB standards Amendment to Statement on Auditing Standards No. 122 Section 700, Forming an Opinion

and Reporting on Financial Statements (Statement on Auditing Standards No. 131) .......... 22

ASB exposure drafts Proposals previously issued ........................................................................................................... 23

AICPA — other Proposals previously issued ........................................................................................................... 24 Accounting and review services interpretations .............................................................................. 24

Governmental Accounting Standards Board

Final GASB guidance GASB Statement No. 81, Irrevocable Split — Interest Agreements .............................................. 25 GASB Statement No. 80, Blending Requirements for Certain Component Units —

an amendment of GASB Statement No. 14 ......................................................................... 25 Implementation Guide No. 2016-1, Implementation Guidance Update — 2016 ............................ 25

Final guidance expected soon Pension Issues, an amendment of GASB Statements No. 67, No. 68 and No. 73 ......................... 26

GASB exposure drafts Issued this quarter

Leases .................................................................................................................................... 27 Highlights of certain proposals previously issued

Fiduciary Activities .................................................................................................................. 27 Other proposals previously issued .................................................................................................. 27

Effective date matrices

Effective date matrix — final FASB pronouncements ................................................................. 28 Effective date matrix — final SEC pronouncements and interpretive releases ............................. 35 Effective date matrix — final PCAOB pronouncements and rules ................................................ 36 Effective date matrix — final ASB standards .............................................................................. 37 Effective date matrix — final GASB pronouncements ................................................................. 38

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Compensation — Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting (ASU 2016-09)

Date issued: 30 March 2016

Summary The guidance will change how companies account for certain aspects of share-based payments to employees. Entities will be required to recognize the income tax effects of awards in the income statement when the awards vest or are settled (i.e., additional paid-in capital or APIC pools will be eliminated). The guidance on employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation and for forfeitures is changing. The Accounting Standards Update (ASU) also provides two practical expedients for nonpublic entities. One will allow them to use a simplified method to estimate the expected term for certain awards. The other will allow nonpublic entities that currently measure liability-classified awards at fair value to make a one-time change in accounting principle to measure them at intrinsic value.

Effective date The guidance is effective for public business entities (PBEs) for fiscal years beginning after 15 December 2016, and interim periods within those fiscal years. For all other entities, it is effective for fiscal years beginning after 15 December 2017, and interim periods within fiscal years beginning after 15 December 2018. Early adoption is permitted in any annual or interim period for which financial statements haven’t been issued or made available for issuance, but all of the guidance must be adopted in the same period. If an entity early adopts the guidance in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period.

Other resources • To the Point, FASB makes targeted amendments to the accounting for employee share-based

payments (SCORE No. 00286-161US)

Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08)

Date issued: 17 March 2016

Summary The amendments to the principal versus agent guidance in the new revenue standard clarify how an entity should identify the unit of accounting (i.e., the specified good or service) for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions, by explaining what a principal controls before the specified good or service is transferred to the customer. The amendments reframe the indicators in the guidance to focus on evidence that an entity is acting as a principal rather than as an agent. The Board also modified some of the existing examples and added new examples to better illustrate the application of the guidance.

Effective date and transition The effective date and transition requirements are the same as the effective date and transition requirements in Accounting Standards Codification (ASC) 606.

Financial Accounting Standards Board

Final FASB guidance

2 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Other resources • To the Point, FASB issues amendments to the principal versus agent guidance in its new revenue

standard (SCORE No. 00095-161US)

Investments — Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting (ASU 2016-07)

Date issued: 15 March 2016 Summary The guidance eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for use of the equity method. The guidance also requires an investor that has an available-for-sale security that subsequently qualifies for the equity method to recognize in net income the unrealized holding gains or losses in accumulated other comprehensive income related to that security when it begins applying the equity method.

Effective date and transition The guidance is effective for all entities for fiscal years beginning after 15 December 2016, and interim periods within those years. Early adoption is permitted in any interim or annual period. The guidance will be adopted on a prospective basis.

Other resources • To the Point, FASB eliminates retrospective application of equity method (SCORE No. 00037-161US)

Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-06)

Date issued: 14 March 2016

Summary The assessment of whether an embedded contingent put or call option is clearly and closely related to the debt host requires an analysis of the four-step decision sequence outlined in ASC 815-15-25-42. That is, an entity does not need to separately assess whether the contingency itself is indexed only to interest rates or the credit risk of the entity.

Effective date The guidance is effective for PBEs for fiscal years beginning after 15 December 2016, and interim periods therein. For other entities, the guidance is effective for fiscal years beginning after 15 December 2017, and interim periods within fiscal years beginning after 15 December 2018. Early adoption is permitted.

Other resources • To the Point, FASB clarifies guidance on assessing contingent put and call options in debt

instruments (SCORE No. BB3153)

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Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-05)

Date issued: 10 March 2016

Summary The novation of a derivative contract (i.e., a change in the counterparty) in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship. The hedge accounting relationship could continue uninterrupted if all of the other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered.

Effective date and transition The guidance is effective for PBEs for fiscal years beginning after 15 December 2016, and interim period therein. For other entities, the guidance is effective for fiscal years beginning after 15 December 2017, and interim periods within fiscal years beginning after 15 December 2018. Early adoption is permitted, including adoption in an interim period.

Entities may apply the guidance prospectively or on a modified retrospective basis.

Other resources • To the Point, FASB says hedge accounting relationships may continue after a novation

(SCORE No. BB3152)

Liabilities — Extinguishments of Liabilities (Subtopic 405-20), Recognition of Breakage for Certain Prepaid Stored-Value Products (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-04)

Date issued: 8 March 2016

Summary The guidance requires entities to recognize liabilities related to the sale of prepaid stored-value products redeemable for goods, services or cash at third-party merchants as financial liabilities in the scope of ASC 405. However, the new guidance amends ASC 405-20 to include a narrow scope exception requiring these entities to recognize breakage (i.e., the value that is ultimately not redeemed by the consumer) for these liabilities in a way that is consistent with how gift card breakage will be recognized under the new revenue recognition standard. Entities are required to disclose the methodology and the significant judgments used to recognize breakage.

Effective date and transition The guidance is effective for PBEs, certain not-for-profit entities and certain employee benefit plans for annual reporting periods beginning after 15 December 2017, and interim periods therein. All other entities are required to adopt the guidance for annual reporting periods beginning after 15 December 2018, and interim periods within annual periods beginning after 15 December 2019. Early adoption is permitted, including in interim periods.

Entities will apply the guidance using either a modified retrospective approach or a full retrospective approach.

4 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Other resources • To the Point, FASB develops a model to recognize breakage for certain prepaid stored-value

products (SCORE No. BB3149)

Intangibles — Goodwill and Other (Topic 350), Business Combinations (Topic 805), Consolidation (Topic 810), and Derivatives and Hedging (Topic 815), Effective Date and Transition Guidance (a consensus of the Private Company Council) (ASU 2016-03)

Date issued: 7 March 2016

Summary The FASB issued guidance that eliminates the effective dates in the four Private Company Council (PCC) alternatives in US GAAP and allows private companies to forgo a preferability assessment the first time they elect each of the alternatives. The guidance also indefinitely extends the transition provisions in the alternatives. Private companies that elect each alternative follow the transition guidance for that alternative rather than the guidance in ASC 250, Accounting Changes and Error Corrections. Private companies that elect any of these alternatives must provide certain disclosures required under ASC 250 for a change in accounting principle, such as the nature of and reason for the change, and indirect effects of the change, if any.

Other resources • To the Point, Final guidance eliminates effective dates in PCC alternatives (SCORE No. BB3151)

Leases (Topic 842) (ASU 2016-02) Date issued: 25 February 2016 Summary The guidance requires lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates today’s real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet.

To apply the guidance, entities will need to focus on whether an arrangement is or contains a lease or a service agreement because there are significant differences in the accounting.

Effective date and transition The standard is effective for PBEs and certain not-for-profit entities and employee benefit plans, for annual periods beginning after 15 December 2018, and interim periods within those years. For all other entities, the standard is effective for annual periods beginning after 15 December 2019, and interim periods within annual periods beginning after 15 December 2020. Early adoption is permitted for all entities.

Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. They have the option to use certain relief.

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Other resources • Technical Line, A closer look at the new leases standard (SCORE No. 00242-161US)

• To the Point, FASB issues final guidance that will change the accounting for leases (SCORE No. BB3142)

Financial Instruments — Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01)

Date issued: 5 January 2016 Summary Entities will have to measure many equity investments at fair value and recognize changes in fair value in net income. The requirement doesn’t apply to equity investments that result in consolidation, those accounted for under the equity method and certain others. The guidance provides a new measurement alternative for equity investments that don’t have readily determinable fair values and don’t qualify for the net asset value practical expedient. Under this alternative, these investments can be measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

The new standard doesn’t change the guidance for classifying and measuring investments in debt securities and loans. Entities will have to record changes in instrument-specific credit risk (the entity’s own credit risk) for financial liabilities measured under the fair value option (FVO) in other comprehensive income (OCI), except for certain financial liabilities of consolidated collateralized financing entities. Entities that are not PBEs will no longer have to disclose the fair value of financial instruments measured at amortized cost, and PBEs will have to make fewer fair value disclosures. Entities also will have to reassess the realizability of a deferred tax asset (DTA) related to an available-for-sale debt security in combination with their other DTAs.

Effective date The guidance is effective for PBEs for annual periods beginning after 15 December 2017, and interim periods therein. For all other entities, it is effective for annual periods beginning after 15 December 2018, and interim periods within annual periods beginning after 15 December 2019. Non-PBEs can early adopt the guidance as of the effective date for PBEs. All entities can early adopt the provision requiring the recognition of changes in fair value related to changes in their own credit risk in OCI for financial liabilities measured using the FVO. Non-PBEs can early adopt a provision that eliminates the fair value disclosures for financial instruments not recognized at fair value.

Other resources • Technical Line, A closer look at the new guidance on classifying and measuring financial

instruments (SCORE No. BB3145) • To the Point, FASB makes targeted amendments to guidance on classifying and measuring financial

instruments (SCORE No. BB3124)

6 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

The FASB has completed deliberations on these proposals and is expected to issue final guidance soon.

Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing

Date proposal issued: 12 May 2015 — comment period ended 30 June 2015

Summary The amendments would clarify when promised goods or services are separately identifiable (i.e., distinct within the context of a contract), an important step in determining whether goods and services should be accounted for as separate performance obligations. In addition, the amendments would allow entities to disregard goods or services that are immaterial in the context of a contract and provide an accounting policy election for accounting for certain shipping and handling activities.

The amendments also would clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property (IP), which will determine whether the entity recognizes revenue over time or at a point in time. The amendments would revise the guidance to address how entities should apply the exception for sales- and usage-based royalties to licenses of IP, recognize revenue for licenses that are not separate performance obligations and evaluate different types of license restrictions (e.g., time-based, geography-based).

Effective date The effective date and transition requirements would be the same as the effective date and transition requirements in ASC 606.

Note: ASU 2016-10 was issued on 14 April 2016.

Other resources • FASB Project Update: Revenue from Contracts with Customers

• To the Point, FASB amends the licenses and performance obligations guidance in its new revenue standard (SCORE No. 00582-161US)

Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients

Date proposal issued: 30 September 2015 — comment period ended 16 November 2015

Summary The amendments would clarify the new revenue recognition guidance on transition, collectibility, noncash consideration and the presentation of sales and other similar taxes. The amendments would clarify that for a contract to be considered “completed” at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. Also, a practical expedient would provide some relief when accounting for contracts that were modified prior to adoption under both the full and modified retrospective transition approaches.

The amendments also would clarify how an entity should evaluate the collectibility threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. The amendments would clarify that an entity should measure the fair value of noncash consideration (e.g., equity) at contract inception when it is determining the transaction

Final guidance expected soon

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price. In addition, the amendments would allow an entity to make an accounting policy election to exclude from the transaction price (i.e., present revenue net of) certain types of taxes collected from a customer, including sales, use, value-added and some excise taxes, if it discloses that policy.

Effective date The effective date and transition requirements would be the same as the effective date and transition requirements in ASC 606.

Other resources • FASB Project Update: Revenue from Contracts with Customers

• To the Point, FASB votes to finalize narrow-scope amendments and practical expedients for its revenue standard (SCORE No. BB3139)

• Technical Line, Final and proposed amendments to the new revenue standards (SCORE No. BB3092)

Financial Instruments — Credit Losses (Subtopic 825-15)

Date proposal issued: 20 December 2012 — comment period ended 31 May 2013 Summary The new credit impairment standard would require entities to estimate and recognize an allowance for lifetime expected credit losses for loans, trade receivables, held-to-maturity debt securities and certain other financial assets measured at amortized cost. For available-for-sale debt securities, entities would use today’s other-than-temporary impairment model modified to require an impairment allowance instead of direct write-downs, and ignore the consideration of “time to recovery.”

The FASB announced the formation of the Transition Resource Group for the upcoming credit impairment standard and held its first public meeting on 1 April 2016.

Effective date The Board set the following effective date for the upcoming standard but will revisit that decision, given the delay in issuance.

For PBEs that meet the definition of an SEC filer, the guidance would be effective for annual periods beginning after 15 December 2018, and interim periods therein. For other PBEs, it would be effective for annual periods beginning after 15 December 2019, and interim periods therein, and for all other entities, it would be effective for annual periods beginning after 15 December 2019, and interim periods within annual periods beginning after 15 December 2020. Early adoption would be allowed but no earlier than the effective date for PBEs that are SEC filers.

Other resources • FASB Project Update: Accounting for Financial Instruments — Credit Impairment

• To the Point, Transition Resource Group for credit losses discusses FASB’s proposed guidance (SCORE No. 00399-161US)

• To the Point, Preparing for the new credit impairment standard (SCORE No. BB3086)

8 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Issued this quarter Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force)

Date issued: 29 January 2016 — comment period ended 29 March 2016 Summary The FASB issued a proposal to address diversity in practice on the following issues involving the classification of cash flows: (1) debt prepayment or extinguishment costs, (2) settlement of zero-coupon bonds, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions and (8) separately identifiable cash flows and the application of the predominance principle.

Effective date and transition The effective date has not yet been determined. The guidance would be applied retrospectively. However, if it is impracticable to do so, an entity would apply the amendments as if the change was made prospectively as of the earliest date practicable.

Other resources • FASB Project Update: EITF Issue No. 15-F: Statement of Cash Flows: Classification of Certain Cash

Receipts and Cash Payments

• EITF Update, November 2015 meeting highlights (SCORE No. BB3087)

Compensation — Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

Date issued: 26 January 2016 — comment period ends 25 April 2016 Summary An employer would have to present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The other components would be presented separately from this line item(s) and from any subtotal of operating income. Under the proposal, only the service cost component would be eligible for capitalization in assets.

Effective date and transition The effective date has not yet been determined. The amendments would be applied retrospectively.

Other resources • FASB Project Update: Improving the Presentation of Net Periodic Pension Cost and Net Periodic

Postretirement Benefit Cost

• To the Point, Employers’ presentation and disclosures for defined benefit retirement plans may change (SCORE No. BB3131)

FASB exposure documents

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Compensation — Retirement Benefits — Defined Benefit Plans — General (Subtopic 715-20), Changes to the Disclosure Requirements for Defined Benefit Plans

Date issued: 26 January 2016 — comment period ends 25 April 2016

Summary As part of its disclosure framework project, the Board proposed requiring certain new disclosures and eliminating others for employers that sponsor defined benefit pension and/or other postretirement benefit plans.

Effective date and transition The effective date has not yet been determined. The proposal would be applied retrospectively for all periods presented, with one exception. Qualitative disclosures about plan assets measured at net asset value would be required beginning with the most recent period presented in the period of adoption.

Other resources • FASB Project Update: Disclosure Framework — Disclosure Review: Defined Benefit Plans

• To the Point, Employers’ presentation and disclosures for defined benefit retirement plans may change (SCORE No. BB3131)

Other proposals previously issued • Fair Value Measurement (Topic 820), Disclosure Framework — Changes to the Disclosure

Requirements for Fair Value Measurement

• Date issued: 3 December 2015 — comment period ended 29 February 2016

• Business Combinations (Topic 805), Clarifying the Definition of a Business

• Date issued: 23 November 2015 — comment period ended 22 January 2016

• Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance

• Date issued: 12 November 2015 — comment period ended 10 February 2016

• Notes to Financial Statements (Topic 235), Assessing Whether Disclosures Are Material

• Date issued: 24 September 2015 — comment period ended 8 December 2015

• Conceptual Framework for Financial Reporting Chapter 3, Qualitative Characteristics of Useful Financial Information

• Date issued: 24 September 2015 — comment period ended 8 December 2015

• Investments — Equity Method and Joint Ventures (Topic 323), Improving the Equity Method of Accounting

• Date related proposal issued: 5 June 2015 — comment period ended 4 August 2015

10 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

• Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954), Presentation of Financial Statements of Not-for-Profit Entities

• Date issued: 22 April 2015 — comment period ended 20 August 2015

• Income Taxes (Topic 740), Intra-Entity Asset Transfers

• Date issued: 22 January 2015 — comment period ended 29 May 2015

• Conceptual Framework for Financial Reporting, Chapter 8: Notes to Financial Statements

• Date issued: 4 March 2014 — comment period ended 14 July 2014

• Insurance (Topic 944), Targeted Improvements to the Accounting for Long-Duration Contracts

• Date related proposal issued: 27 June 2013 — comment period ended 25 October 2013

Other resources • Comment letter – Fair value measurement disclosures (SCORE No. BB3144)

• Comment letter – Disclosures about government assistance (SCORE No. BB3138)

• Comment letter – Clarifying the definition of a business (SCORE No. BB3130)

• 2015 Standard Setter Update (SCORE No. BB3128)

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Revenue recognition developments In addition to the amendments discussed above, the FASB voted to propose eight technical corrections related to the revenue standard, the majority of which involve consequential amendments to other accounting topics affected by the revenue standard. The FASB also voted to propose another practical expedient that would allow an entity not to disclose variable consideration allocated to unsatisfied performance obligations in certain situations because an estimate would be made solely for disclosure purposes.

The FASB has scheduled three meetings in 2016, including one in April, for its Transition Resource Group for Revenue Recognition (TRG) to discuss any broad implementation questions raised by stakeholders. SEC Chief Accountant James Schnurr recently said he strongly encourages SEC registrants to follow the conclusions of TRG members on topics on which they agreed or discuss with the SEC staff why they plan to use a different approach.

Separately, the SEC Observer to the EITF said at an EITF meeting that the staff is rescinding four SEC Staff Observer comments on narrow issues related to revenue effective upon adoption of the new standard. The staff has been reviewing its revenue guidance in light of the new standard but hasn’t yet addressed what will happen with SAB Topic 13.

Other resources • Technical Line, Presentation and disclosure requirements for the new revenue recognition

standard (SCORE No. BB3123)

• Joint Transition Resource Group for Revenue Recognition items of general agreement (SCORE No. BB2927)

• Financial Reporting Developments: Revenue from contracts with customers (ASC 606) (SCORE No. BB3043)1

What’s next — agenda highlights FASB agenda In addition to the topics above, the FASB’s agenda includes:

• Accounting for financial instruments: hedging

• Simplifying the balance sheet classification of debt

• Liabilities and equity: targeted improvements

• Accounting for goodwill impairment

• Clarifying when a not-for-profit entity that is a general partner should consolidate a for-profit limited partnership (or similar entity)

1 A number of industry supplements to this Financial Reporting Developments are available.

Other FASB

12 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

• Consolidation: interests held through related parties that are under common control

• Disclosure framework: disclosure review (various topics)

• Clarifying the scope of Subtopic 610-20 and accounting for partial sales of nonfinancial assets

• Accounting for identifiable intangible assets in a business combination for public business entities and not-for-profit entities

• Subsequent accounting for goodwill for public business entities and not-for-profit entities

• Accounting for interest income associated with the purchase of callable debt securities

• Nonemployee share-based payment accounting improvements

• Conceptual framework: measurement and presentation

• Technical corrections and improvements

EITF agenda At its March 2016 meeting, the Task Force reached a consensus-for-exposure that restricted cash would be included with cash and cash equivalents on the statement of cash flows. As a result, entities would no longer have to determine how to classify transfers to or from restricted cash within the statement of cash flows. An entity would reconcile the total of cash, cash equivalents and restricted cash on the statement of cash flows to the related captions in the balance sheet either on the face of the statement of cash flows or in the notes to the financial statements. The next EITF meeting is scheduled for 10 June 2016.

PCC agenda The PCC’s agenda currently includes a project to clarify the application of the variable interest entities guidance to entities under common control that are not already addressed in ASU 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements. The next PCC meeting is scheduled for 12 April 2016.

Other resources • FASB Technical Agenda

• To the Point, FASB moves closer to issuing a proposal on income tax disclosures (SCORE No. 00292-161US)

• EITF Update, March 2016 meeting highlights (SCORE No. BB3147)

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Security-Based Swap Transactions Connected with a Non-U.S. Person's Dealing Activity That Are Arranged, Negotiated, or Executed By Personnel Located in a U.S. Branch or Office or in a U.S. Branch or Office of an Agent; Security-Based Swap Dealer De Minimis Exception (Release No. 34-77104)

Date issued: 10 February 2016

Summary The SEC adopted final rules specifying when certain non-US persons are required to count a security-based swap transaction with another non-US person toward the requirement (i.e., in its de minimis calculations) to register as a security-based swap dealer (SBS entity). International organizations (e.g., International Monetary Fund, International Bank for Reconstruction and Development, Inter-American Development Bank) are excluded from the definition of a US person, and transactions in which they are the counterparty may be exempt from being included in the calculations.

Effective date The rules are effective 19 April 2016, with a compliance date of the later of (1) 21 February 2017 or (2) the SBS entity counting date, as defined.

Simplification of Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by Reference on Form S-1 for Smaller Reporting Companies (Release No. 33-10003)

Date issued: 13 January 2016

Summary The Fixing America’s Surface Transportation Act2 (FAST Act) changed provisions of the Jumpstart Our Business Startups Act (JOBS Act) and other SEC requirements to further facilitate capital formation by smaller companies. In January 2016, the SEC approved interim final rules implementing two of the FAST Act provisions that revise registration forms for emerging growth companies (EGCs) and smaller reporting companies (SRCs).

One rule allows EGCs that are filing or submitting initial public offering (IPO) registration statements to omit financial information for historical periods that they reasonably believe will not be required when the registration statements (i.e., Form S-1 or F-1) become effective, as long as they file the appropriate periods before distributing a preliminary prospectus to investors. In December 2015, in anticipation of this rule, the SEC staff issued two Compliance and Disclosure Interpretations related to the treatment of interim periods that remain relevant to implementing this rule.

2 The FAST Act was enacted on 4 December 2015. The full text is available at: http://www.gpo.gov/fdsys/pkg/BILLS-

114hr22enr/pdf/BILLS-114hr22enr.pdf.

Securities and Exchange Commission

SEC final rules

14 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

The other rule allows SRCs to “forward incorporate” information they provide in SEC filings into an effective Form S-1 if they meet the eligibility requirements in Form S-1 for historical incorporation by reference (i.e., they are current on Exchange Act reporting and have filed an annual report).

Effective date The rules were effective as of 19 January 2016.

Other resources • Comment letter — FAST Act (SCORE No. CC0436)

15

Issued this quarter

Covered Broker-Dealer Provisions under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Release No. 34-77157)

Date issued: 17 February 2016 — comment period ends 2 May 2016

Summary The SEC and the Federal Deposit Insurance Corporation (FDIC) proposed a rule to implement the Title II liquidation provisions of the Dodd-Frank Wall Street Reform Act (the Dodd-Frank Act) applicable to covered broker-dealers. The proposed rule would clarify the roles of the FDIC as a receiver and the Securities Investor Protection Corporation (SIPC) as a trustee in liquidation proceedings. The objective of the proposed rule is to facilitate the transfer of assets from the liquidating company without systemic disruptions while maintaining investor protections granted under the Securities Investor Protection Act of 1970.

Effective date The rule does not suggest an effective date.

Highlights of certain proposals previously issued Disclosure of Payments by Resource Extraction Issuers (Release No. 34-76620)

Date issued: 11 December 2015 — comment period extended through 16 February 2016. Respondents had until 8 March 2016, to respond to issues raised in initial comments.

Summary The SEC proposed a rule that would require resource extraction issuers to disclose payments they made to foreign governments (including subnational governments) or to the US Federal Government related to the commercial development of oil, natural gas or minerals (extractive activities). Those issuers also would be required to disclose information about certain types of payments they made to further their extractive activities, including in-kind payments that are not de minimis.

The proposed rule would apply to foreign and domestic entities that file annual reports with the SEC under the Securities Exchange Act and are engaged in extractive activities. These entities would have to file a Form SD within 150 days of their fiscal year end to report payments related to extractive activities that they, their subsidiaries or other entities under their control made to governments. The proposed rule would allow entities to file as an exhibit a report required by foreign regulators or by the US Extractive Industries Transparency Initiative if the SEC determines that the reporting requirements are substantially similar to its own.

The proposed rule, mandated by the Dodd-Frank Act, is aimed at promoting greater transparency about resource extraction-related payments made to governments.

Effective date The guidance would be effective for an entity’s fiscal year ending no earlier than one year after the SEC issues the final rule.

SEC rule proposals and other releases

16 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Other resources • To the Point, SEC proposes a new rule about payments to governments for extractive activities

(SCORE No. CC0434)

Request for Comment on the Effectiveness of Financial Disclosures about Entities Other than the Registrant (Release No. 33-9929)

Date issued: 25 September 2015 — comment period ended 30 November 2015

Summary The SEC issued a request for comment on how to enhance the effectiveness of Regulation S-X disclosures provided by registrants about other entities such as acquired businesses, equity method investees, subsidiary issuers and guarantors. The SEC seeks input on how investors use financial information about other entities and the challenges companies face in obtaining and preparing this information.

The SEC made the request as part of its disclosure effectiveness initiative, which grew out of a December 2013 study of disclosure requirements mandated by the JOBS Act.

Other resources • To the Point, Our recommendations for changing Regulation S-X disclosures about entities other

than the registrant (SCORE No. CC0429)

• To the Point, SEC seeks feedback on Regulation S-X and required financial information about other entities (SCORE No. CC0422)

• Comment letter, Regulation S-X requirements for other entities (SCORE No. CC0430)

• Comment letter, Regulation S-X requirements for registrant’s financial statements (SCORE No. CC0431)

Other proposals previously issued • Use of Derivatives by Registered Investment Companies and Business Development Companies

(Release No. IC-31933)

• Date issued: 11 December 2015 — comment period ended 28 March 2016

• Exemptions to Facilitate Intrastate and Regional Securities Offerings (Release No. 33-9973)

• Date issued: 30 October 2015 — comment period ended 11 January 2016

• Open-End Fund Liquidity Risk Management Programs; Swing Pricing (Release No. 33-9922)

• Date issued: 22 September 2015 — comment period ended 13 January 2016

• Possible Revisions to Audit Committee Disclosures (Release No. 33-9862)

• Date issued: 1 July 2015 — comment period ended 8 September 2015

17

• Listing Standards for Recovery of Erroneously Awarded Compensation (Release No. 33-9861)

• Date issued: 1 July 2015 — comment period ended 14 September 2015

• Investment Company Reporting Modernization (Release No. 33-9776)

• Date issued: 20 May 2015 — re-opened comment period ended 13 January 2016

• Amendments to Form ADV and Investment Advisers Act Rules (Release No. IA-4091)

• Date issued: 20 May 2015 — comment period ended 11 August 2015

• Pay versus Performance (Release No. 34-74835)

• Date issued: 29 April 2015 — comment period ended 6 July 2015

• Disclosure of Hedging by Employees, Officers and Directors (Release No. 33-9723)

• Date issued: 9 February 2015 — comment period ended 20 April 2015

• Changes to Exchange Act Registration Requirements to Implement Title V and Title VI of the JOBS Act (Release No. 33-9693)

• Date issued: 18 December 2014 — comment period ended 2 March 2015

• Amendments to Regulation D, Form D and Rule 156 under the Securities Act (Release No. 33-9416)

• Date issued: 10 July 2013 — comment period ended 4 November 2013

• Prohibition against Conflicts of Interest in Certain Securitizations (Release No. 34-65355)

• Date issued: 19 September 2011 — comment period ended 13 February 2012

• Incentive-Based Compensation Arrangements (Release No. 34-64140)

• Date issued: 29 March 2011 — comment period ended 31 May 2011

• End-User Exception to Mandatory Clearing of Security-Based Swaps (Release No. 34-63556)

• Date issued: 15 December 2010 — comment period ended 22 July 2013

• Reporting of Proxy Votes on Executive Compensation and Other Matters (Release No. 34-63123)

• Date issued: 18 October 2010 — comment period ended 18 November 2010

Other resources • 2015 Standard Setter Update (SCORE No. BB3128)

• Comment letter — Swing pricing (SCORE No. BB3129)

• Comment letter - SEC concept release on audit committee disclosures (SCORE No. CC0417)

• Comment letter - SEC proposal to regulate funds’ use of derivatives (SCORE No. 00262-161US)

• Comment letter - SEC proposed clawback rule (SCORE No. CC0418)

18 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

2016 financial reporting taxonomy Summary The SEC staff has updated the EDGAR system to allow companies to use the 2016 XBRL US GAAP taxonomy, which adds tags for accounting standards updates and makes certain industry-related changes and other revisions. The SEC staff strongly encourages companies to transition to the 2016 taxonomy for their first reporting period ending after 7 March 2016 (e.g., the first quarter Form 10-Q for calendar-year registrants). Companies also may continue to use the 2015 or 2014 taxonomies. The staff does not expect to remove the 2014 taxonomy before June 2016.

SEC staff updates its Financial Reporting Manual guidance Summary The SEC staff in the Division of Corporation Finance updated its Financial Reporting Manual to clarify certain guidance in a number of areas, including:

• Providing guidance on reporting issues related to the adoption of the new revenue recognition standard (ASC 606), such as:

• Registrants using the full retrospective method will not be required to revise the earliest two years of the five-year selected financial data table if they provide disclosures about the comparability of the data.

• Registrants using the full retrospective method will not be required to revise the earliest two years when presenting the five-year ratio of earnings to fixed charges.

• The transition date and method of adopting ASC 606 for significant acquired businesses must conform to those of the registrant when pro forma financial information is provided to comply with Article 11 of Regulation S-X.

• Clarifying that registrants are not required to recompute the significance of equity method investees for prior periods after a retrospective change in accounting principle (e.g., ASC 606) for purposes of complying with Rules 3-09 and 4-08(g) of Regulation S-X

• Revising the guidance to conform with recent interim final rules adopted by the SEC related to EGCs, including the ability to omit certain historical financial information from an IPO filing or confidential submission when it is not reasonably expected to be included in the registration statement at the time of IPO

NYSE MKT can offer complimentary services to newly listed issuers Summary The SEC published rules proposed by the NYSE MKT LLC stock exchange, which must be approved by the SEC, that allow the exchange to give certain newly listed issuers complimentary products and services for a period of 24 calendar months. The services include web hosting, webcasting, a whistleblower hotline, news distribution and corporate governance tools. The NASDAQ exchange currently offers similar services to its listed issuers.

Other SEC

19

FPIs to provide semiannual financial information Summary The NYSE issued a new rule requiring a foreign private issuer (FPI) to submit semiannual unaudited financial information on a Form 6-K to the SEC no later than six months after the end of the company’s second quarter. Although the Securities Exchange Act requires FPIs to provide US investors information that is material to an investment decision on a Form 6-K (which may include interim financial information or other information filed in its home jurisdiction), the NYSE believes that it is necessary to make semiannual financial reporting a mandatory listing requirement for all listed FPIs (NASDAQ’s listing standards already include such a requirement).

SEC approves 2016 PCAOB budget and accounting support fee Summary In a 2-to-1 vote, the SEC approved the 2016 budget of the Public Company Accounting Oversight Board (PCAOB) and the annual accounting support fee that funds the budget. This year’s budget is $257.7 million, up 3% from 2015, and it will be primarily funded by $253.3 million in accounting support fees from public companies, a 12% increase from 2015.

20 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Highlights of certain proposals previously issued

Improving the Transparency of Audits: Rules to Require Disclosure of Certain Audit Participants on a New PCAOB Form and Related Amendments to Auditing Standards (PCAOB Release No. 2015-008)

Date adopted: 15 December 2015 (subject to SEC approval)

Summary The PCAOB adopted final rules and amendments to auditing standards that require audit firms to file a new PCAOB Form AP, Auditor Reporting of Certain Audit Participants, for each issuer audit, disclosing:

• The name of the audit partner responsible for issuing the firm’s audit report

• The name, location and extent of participation of other accounting firms whose participation exceeded 5% of the total audit hours

• The number and aggregate extent of participation of all other accounting firms that took part in the audit

In most cases, audit firms need to file Form AP with the PCAOB within 35 days after the auditor’s report is first included in a filing with the SEC. In the case of initial public offerings, audit firms will have 10 days after the auditor’s report is first included in a filing with the SEC to file Form AP.

If approved by the SEC, disclosure of the name of the audit partner will be required for auditors’ reports issued on or after 31 January 2017, or three months after SEC approval of the rules, whichever is later. For disclosure of other accounting firms participating in the audit, disclosures would be required for auditors’ reports issued on or after 30 June 2017.

Other resources • To the Point, PCAOB adopts final rules for audit transparency disclosures (SCORE No. EE1017)

Other proposals previously issued • Concept Release on Audit Quality Indicators (PCAOB Release No. 2015-005)

• Date issued: 30 June 2015 — comment period ended 29 September 2015

• Proposed Auditing Standards, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion; The Auditor’s Responsibilities Regarding Other Information in Certain Documents Containing Audited Financial Statements and the Related Auditor’s Report; and Related Amendments to PCAOB Standards (PCAOB Release No. 2013-005)

• Date issued: 13 August 2013 — comment period ended 2 May 2014

• Concept Release on Auditor Independence and Audit Firm Rotation (PCAOB Release No. 2011-006)

• Date issued: 16 August 2011 — comment period ended 19 November 2012

Public Company Accounting Oversight Board

PCAOB proposed standards and other projects

21

• Application of the “Failure to Supervise” Provision of the Sarbanes-Oxley Act of 2002 and Solicitation of Comment on Rulemaking Concepts (PCAOB Release No. 2010-005)

• Date issued: 5 August 2010 — comment period ended 3 November 2010

• Proposed Auditing Standard, Confirmation (PCAOB Release No. 2010-003)

• Date issued: 13 July 2010 — comment period ended 13 September 2010

22 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Amendment to Statement on Auditing Standards No. 122 Section 700, Forming an Opinion and Reporting on Financial Statements (Statement on Auditing Standards No. 131)

Date issued: 21 January 2016

Summary The amendment clarifies that when an auditor conducts an audit in accordance with the standards of the PCAOB and the audit is not within the jurisdiction of the PCAOB, the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct requires the auditor to also conduct the audit in accordance with generally accepted auditing standards (GAAS). In such situations, when the auditor refers to the standards of the PCAOB in addition to GAAS in the auditor’s report, the auditor is required to use the form of the report required by the standards of the PCAOB, amended to state that the audit was also conducted in accordance with GAAS.

The amendments apply in circumstances in which a non-issuer entity desires, or is required by contractual agreement, to obtain an audit in accordance with the standards of the PCAOB. Examples of audits where the amendments apply are audits of clearing agencies and futures commission merchants registered with the Commodity Futures Trading Commission (CFTC).

Effective date The statement is effective for audits of financial statements for periods ending on or after 15 June 2016.

Auditing Standards Board

Final ASB standards

23

Proposals previously issued • Proposed Statement on Standards for Attestation Engagements, Reporting on an

Examination of Controls at a Service Organization Relevant to User Entities’ Internal Control Over Financial Reporting: Clarification and Recodification

• Date issued: 18 September 2014 — comment period ended 18 December 2014

• Proposed Statement on Standards for Attestation Engagements, Subject-Matter Specific Attestation Standards: Clarification and Recodification

• Date issued: 28 January 2014 — comment period ended 27 May 2014

• Proposed Statement on Standards for Attestation Engagements, Attestation Standards: Clarification and Recodification

• Date issued: 24 July 2013 — comment period ended 24 October 2013

Note: The ASB finalized these exposure drafts and issued SSAE No. 18, Attestation Standards: Clarification and Recodification, on 5 April 2016.

Other resources • 2015 Standard Setter Update (SCORE No. BB3128)

ASB exposure drafts

24 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Proposals previously issued • Proposed Statement on Standards for Accounting and Review Services: Compilation of

Prospective Financial Information; Compilation of Pro Forma Financial Information; Omnibus Statement on Standards for Accounting and Review Services — 2016

• Date issued: 8 December 2015 — comment period ends 6 May 2016

Other resources • 2015 Standard Setter Update (SCORE No. BB3128)

Accounting and review services interpretations Date issued: 18 February 2016

Interpretation No. 1, Considerations Related to Reviews Performed in Accordance with International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements The interpretation of AR-C Section 90, Review of Financial Statements, indicates that when a review is conducted in accordance with Statements on Standards for Accounting and Review Services (SSARS) and another set of review standards, the practitioner may refer to the other set of review standards in its review report. In these cases, the practitioner should comply with both sets of standards.

AICPA — other

25

GASB Statement No. 81, Irrevocable Split — Interest Agreements Date issued: 29 March 2016 Summary The guidance addresses when resources from irrevocable split-interest agreements that are administered by third parties constitute assets for accounting and financial reporting purposes. The statement also provides guidance for circumstances in which a government holds the assets. In both cases, the guidance addresses when the resources should be recognized as revenue and deferred inflows of resources.

Effective date The requirements of the statement are effective for reporting periods beginning after 15 December 2016. Earlier application is encouraged.

GASB Statement No. 80, Blending Requirements for Certain Component Units — an amendment of GASB Statement No. 14

Date issued: 11 February 2016 Summary The guidance clarifies the display requirements in GASB Statement No. 14, The Financial Reporting Entity, by requiring certain component units incorporated as not-for-profit corporations in which the primary government is the sole corporate member to be blended into the primary state or local government’s financial statements in a manner similar to a department or activity of the primary government.

While this guidance applies to a limited number of governmental units, such as public hospitals, it is meant to enhance the comparability of financial statements among those units.

Effective date The requirements of the statement are effective for reporting periods beginning after 15 June 2016. Earlier application is encouraged.

Implementation Guide No. 2016-1, Implementation Guidance Update — 2016

Date issued: 24 March 2016

Summary This implementation guide addresses questions that have been raised about the standards the GASB recently issued on fair value and tax abatement disclosures. The guide also addresses practice issues on other topics.

Effective date The implementation guide is effective for reporting periods beginning after 15 June 2016. Earlier application is permitted if the pronouncement addressed by the question and answer has been implemented.

Governmental Accounting Standards Board

Final GASB guidance

26 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Pension Issues, an amendment of GASB Statements No. 67, No. 68 and No. 73

Date proposal issued: 22 December 2015 — comment period ended 12 February 2016 (Final guidance was approved by the GASB on 31 March 2016.)

Summary The proposal would address the following practice issues raised by stakeholders during the implementation of Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68:

• Presentation of payroll-related measures in required supplementary information

• Selection of assumptions and the treatment of deviations from the guidance in Actuarial Standards of Practice for financial reporting purposes

• Classification of payments made by employers to satisfy plan member contribution requirements

Effective date The proposed statement would generally be effective for reporting periods beginning after 15 June 2016. Earlier application is encouraged.

Note: GASB Statement No. 82 was issued on 11 April 2016.

Final guidance expected soon

27

Issued this quarter Leases

Date issued: 8 February 2016 — comment period ends 31 May 2016 Summary The proposal would establish a single approach for state and local governments to report leases based on the principle that leases are financings of the right to use an underlying asset. The proposal would provide guidance for lease contracts for nonfinancial assets but exclude grants, donated assets and leases of intangible assets (such as patents and software licenses). A lessee government would be required to recognize a lease liability and intangible asset representing its right to use the leased asset. A lessor government would be required to recognize a lease receivable and a deferred inflow of resources. The proposal would provide limited exceptions for short-term leases (12 months or less) and financed purchases, among other things.

The proposal also would provide guidance on accounting for lease terminations and modifications, sale–leaseback transactions, non-lease components embedded in lease contracts and related party leases.

Effective date The proposed statement would be effective for reporting periods beginning after 15 December 2018. Earlier application would be permitted.

Highlights of certain proposals previously issued Fiduciary Activities

Date issued: 22 December 2015 — comment period ended 31 March 2016 Summary The proposal would establish guidance regarding what constitutes fiduciary activities for financial reporting purposes, the recognition of liabilities to beneficiaries and how fiduciary activities should be reported. The objective of this proposal is to enhance the comparability and consistency of fiduciary activity reporting by state and local governments. The proposal also would improve the usefulness of fiduciary activity information, primarily for assessing the accountability of governments in their roles as fiduciaries.

Effective date and transition The proposed statement would be effective for reporting periods beginning after 15 December 2017. Earlier application is encouraged.

Other proposals previously issued • Certain Asset Retirement Obligations

• Date issued: 22 December 2015 — comment period ended 31 March 2016

GASB exposure drafts

28 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Note: Early adoption generally is permitted unless otherwise noted.

Effective in 2016 for public(3) calendar year-end entities(4) ASU 2015-16 Business Combinations (Topic 805), Simplifying

the Accounting for Measurement-Period Adjustments

Effective for fiscal years, including interim periods within those fiscal years, beginning after 15 December 2015.

ASU 2015-12 Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient

Effective for fiscal years beginning after 15 December 2015.

ASU 2015-10 Technical Corrections and Improvements Effective upon issuance (12 June 2015) for amendments that do not have transition guidance. Amendments that are subject to transition guidance: Effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2015.

ASU 2015-09 Financial Services — Insurance (Topic 944), Disclosures about Short-Duration Contracts

Effective for annual periods beginning after 15 December 2015, and interim periods within annual periods beginning after 15 December 2016.

ASU 2015-07 Fair Value Measurement (Topic 820), Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)

Effective for fiscal years beginning after 15 December 2015, and interim periods within those fiscal years.

ASU 2015-06 Earnings Per Share (Topic 260), Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions

Effective for fiscal years beginning after 15 December 2015, and interim periods within those fiscal years.

ASU 2015-05 Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement

Effective for annual periods, including interim periods within those annual periods, beginning after 15 December 2015.

ASU 2015-04 Compensation — Retirement Benefits (Topic 715), Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets

Effective for fiscal years beginning after 15 December 2015, and interim periods within those fiscal years.

ASU 2015-03 Interest — Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs

Effective for fiscal years beginning after 15 December 2015, and interim periods within those fiscal years.

ASU 2015-02 Consolidation (Topic 810), Amendments to the Consolidation Analysis

Effective for fiscal years, and for interim periods within those fiscal years, beginning after 15 December 2015.

ASU 2015-01 Income Statement — Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items

Effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2015.

3 Refer to each ASU to determine which types of entities (e.g., public business entities, not-for-profits, employee benefit plans) are subject to these effective dates. 4 The JOBS Act allows emerging growth companies to follow private company effective dates for new or revised accounting standards issued after 5 April 2012.

However, an emerging growth company must follow public company effective dates for all such standards if it has disclosed an election to do so.

Effective date matrices

Effective date matrix — final FASB pronouncements

29

Effective in 2016 for public(3) calendar year-end entities(4) ASU 2014-16 Derivatives and Hedging (Topic 815),

Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity

Effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2015.

ASU 2014-15 Presentation of Financial Statements — Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern

Effective for annual periods ending after 15 December 2016, and interim periods within annual periods beginning after 15 December 2016.

ASU 2014-13 Consolidation (Topic 810), Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity

Effective for annual periods, and interim periods within those annual periods, beginning after 15 December 2015.

ASU 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

Effective for annual periods, and interim periods within those annual periods, beginning after 15 December 2015.

ASU 2014-10 Development Stage Entities (Topic 915), Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation

Amendments to ASC 915: Effective for annual reporting periods beginning after 15 December 2014, and interim periods therein. Amendments to ASC 810: Effective for annual reporting periods beginning after 15 December 2015, and interim periods therein.

Effective after 2016 for public(3) calendar year-end entities(4) ASU 2016-09 Compensation — Stock Compensation (Topic 718),

Improvements to Employee Share-Based Payment Accounting

Effective for fiscal years beginning after 15 December 2016, including interim periods within those fiscal years.

ASU 2016-08 Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

Effective for annual reporting periods beginning after 15 December 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after 15 December 2016, including interim reporting periods within that reporting period.(5)

ASU 2016-07 Investments — Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting

Effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2016.

ASU 2016-06 Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments

Effective for fiscal years beginning after 15 December 2016, and interim periods within those fiscal years.

ASU 2016-05 Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships

Effective for fiscal years beginning after 15 December 2016, and interim periods within those fiscal years.

ASU 2016-04 Liabilities — Extinguishments of Liabilities (Subtopic 405-20), Recognition of Breakage for Certain Prepaid Stored-Value Products

Effective for fiscal years beginning after 15 December 2017, and interim periods within those fiscal years.

ASU 2016-02 Leases (Topic 842) Effective for fiscal years beginning after 15 December 2018, and interim periods within those fiscal years.

5 ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, provides a one-year deferral of the effective date for the

new revenue standard for public and nonpublic entities reporting under US GAAP.

30 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Effective after 2016 for public(3) calendar year-end entities(4) ASU 2016-01 Financial Instruments — Overall

(Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities

Effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2017. Earlier application is prohibited except for the presentation guidance in ASC 825-10-45-5 through 45-7.

ASU 2015-17 Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes

Effective for annual periods beginning after 15 December 2016, and interim periods within those annual periods.

ASU 2015-11 Inventory (Topic 330), Simplifying the Measurement of Inventory

Effective for fiscal years beginning after 15 December 2016, including interim periods within those fiscal years.

ASU 2014-09 Revenue from Contracts with Customers (Topic 606)

Effective for annual reporting periods beginning after 15 December 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after 15 December 2016, including interim reporting periods within that reporting period.(5)

Effective prior to 2016 for public(3) calendar year-end entities(4) ASU 2015-15 Interest — Imputation of Interest (Subtopic 835-30),

Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update)

Effective upon announcement (18 June 2015).(6)

ASU 2015-13 Derivatives and Hedging (Topic 815), Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets

Effective upon issuance (10 August 2015).

ASU 2015-08 Business Combinations (Topic 805), Pushdown Accounting — Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115 (SEC Update)

Effective upon issuance of SAB 115 (18 November 2014). (6)

ASU 2014-14 Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40), Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure

Effective for annual periods, and interim periods within those annual periods, beginning after 15 December 2014.

ASU 2014-11 Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures

Effective for the first interim or annual period beginning after 15 December 2014. Earlier application is prohibited. Disclosures for transactions accounted for as secured borrowings: Effective for annual periods beginning after 15 December 2014, and for interim periods beginning after 15 March 2015.

ASU 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

Effective for annual periods beginning on or after 15 December 2014, and interim periods within those years.

ASU 2014-05 Service Concession Arrangements (Topic 853) Effective for annual periods, and interim periods within those annual periods, beginning after 15 December 2014.

6 This ASU adds or amends SEC paragraphs in the Codification that describe SEC guidance or SEC staff views that the FASB includes as a convenience to

Codification users.

31

Effective prior to 2016 for public(3) calendar year-end entities(4) ASU 2014-04 Receivables — Troubled Debt Restructurings by

Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure

Effective for annual periods, and interim periods within those annual periods, beginning after 15 December 2014.

ASU 2014-01 Investments — Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects

Effective for annual periods, and interim reporting periods within those annual periods, beginning after 15 December 2014.

ASU 2013-06 Not-for-Profit Entities (Topic 958), Services Received from Personnel of an Affiliate

Effective for fiscal years beginning after 15 June 2014, and interim and annual periods thereafter.

Effective in 2016 for nonpublic(7)calendar year-end entities ASU 2015-12 Plan Accounting: Defined Benefit Pension Plans

(Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient

Effective for fiscal years beginning after 15 December 2015.

ASU 2015-10 Technical Corrections and Improvements Effective upon issuance (12 June 2015) for amendments that do not have transition guidance. Amendments that are subject to transition guidance: Effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2015.

ASU 2015-05 Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement

Effective for annual periods beginning after 15 December 2015, and interim periods in annual periods beginning after 15 December 2016.

ASU 2015-03 Interest — Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs

Effective for fiscal years beginning after 15 December 2015, and interim periods within fiscal years beginning after 15 December 2016.

ASU 2015-01 Income Statement — Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items

Effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2015.

ASU 2014-18 Business Combinations (Topic 805), Accounting for Identifiable Intangible Assets in a Business Combination

Effective upon adoption of the accounting alternative.(8)

ASU 2014-16 Derivatives and Hedging (Topic 815), Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity

Effective for fiscal years beginning after 15 December 2015, and interim periods within fiscal years beginning after 15 December 2016.

7 Refer to each ASU to determine which types of entities (e.g., private companies, not-for-profits, employee benefit plans) are subject to these effective dates. 8 The FASB issued ASU 2016-03, Intangibles — Goodwill and Other (Topic 350), Business Combinations (Topic 805), Consolidation (Topic 810), Derivatives and

Hedging (Topic 815), Effective Date and Transition Guidance, that eliminates the effective dates in the four alternatives developed by the Private Company Council (PCC). The guidance makes all four PCC alternatives available for election immediately.

32 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Effective in 2016 for nonpublic(7)calendar year-end entities ASU 2014-15 Presentation of Financial Statements — Going

Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern

Effective for annual periods ending after 15 December 2016, and interim periods within annual periods beginning after 15 December 2016.

ASU 2014-13 Consolidation (Topic 810), Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity

Effective for annual periods ending after 15 December 2016, and interim periods beginning after 15 December 2016.

ASU 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period

Effective for annual periods, and interim periods within those annual periods, beginning after 15 December 2015.

Effective after 2016 for nonpublic(7) calendar year-end entities ASU 2016-09 Compensation — Stock Compensation (Topic 718),

Improvements to Employee Share-Based Payment Accounting

Effective for fiscal years beginning after 15 December 2017, and interim periods within fiscal years beginning after 15 December 2018.

ASU 2016-08 Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

Effective for annual reporting periods beginning after 15 December 2018, and interim reporting periods within annual reporting periods beginning after 15 December 2019. Application prior to the original effective date for public entities is prohibited. (5)

ASU 2016-07 Investments — Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting

Effective for fiscal years, and interim periods within those fiscal years, beginning after 15 December 2016.

ASU 2016-06 Derivatives and Hedging (Topic 815), Contingent Put and Call Options in Debt Instruments

Effective for fiscal years beginning after 15 December 2017, and interim periods within fiscal years beginning after 15 December 2018.

ASU 2016-05 Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships

Effective for fiscal years beginning after 15 December 2017, and interim periods within fiscal years beginning after 15 December 2018.

ASU 2016-04 Liabilities — Extinguishments of Liabilities (Subtopic 405-20), Recognition of Breakage for Certain Prepaid Stored-Value Products

Effective for fiscal years beginning after 15 December 2018, and interim periods within fiscal years beginning after 15 December 2019.

ASU 2016-02 Leases (Topic 842) Effective for fiscal years beginning after 15 December 2019, and interim periods within fiscal years beginning after 15 December 2020.

ASU 2016-01 Financial Instruments — Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities

Effective for fiscal years beginning after 15 December 2018, and interim periods within fiscal years beginning after 15 December 2019. Application prior to the effective date for public business entities is prohibited, except for the presentation guidance in ASC 825-10-45-5 through 45-7, and the provision in ASC 825-10-65-2 that eliminates the fair value disclosures for financial instruments required by the General Subsection of ASC 825-10-50.

ASU 2015-17 Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes

Effective for annual periods beginning after 15 December 2017, and interim periods within annual periods beginning after 15 December 2018.

ASU 2015-16 Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments

Effective for fiscal years beginning after 15 December 2016, and interim periods within fiscal years beginning after 15 December 2017.

ASU 2015-11 Inventory (Topic 330), Simplifying the Measurement of Inventory

Effective for fiscal years beginning after 15 December 2016, and interim periods within fiscal years beginning after 15 December 2017.

ASU 2015-09 Financial Services — Insurance (Topic 944), Disclosures about Short-Duration Contracts

Effective for annual periods beginning after 15 December 2016, and interim periods within annual periods beginning after 15 December 2017.

33

Effective after 2016 for nonpublic(7) calendar year-end entities ASU 2015-07 Fair Value Measurement (Topic 820), Disclosures

for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)

Effective for fiscal years beginning after 15 December 2016, and interim periods within those fiscal years.

ASU 2015-04 Compensation — Retirement Benefits (Topic 715), Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets

Effective for fiscal years beginning after 15 December 2016, and interim periods within fiscal years beginning after 15 December 2017.

ASU 2015-02 Consolidation (Topic 810), Amendments to the Consolidation Analysis

Effective for fiscal years beginning after 15 December 2016, and for interim periods within fiscal years beginning after 15 December 2017.

ASU 2014-10 Development Stage Entities (Topic 915), Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation

Amendments to ASC 915: Effective for annual reporting periods beginning after 15 December 2014, and for interim reporting periods beginning after 15 December 2015. Amendments to ASC 810: Effective for annual reporting periods beginning after 15 December 2016, and for interim reporting periods beginning after 15 December 2017.

ASU 2014-09 Revenue from Contracts with Customers (Topic 606)

Effective for annual reporting periods beginning after 15 December 2018, and interim reporting periods within annual reporting periods beginning after 15 December 2019. Application prior to the original effective date for public entities is prohibited. (5)

Effective prior to 2016 for nonpublic(7) calendar year-end entities ASU 2015-13 Derivatives and Hedging (Topic 815), Application

of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets

Effective upon issuance (10 August 2015).

ASU 2014-14 Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40), Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure

Effective for annual periods ending after 15 December 2015, and interim periods beginning after 15 December 2015.

ASU 2014-11 Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures

Effective for annual periods beginning after 15 December 2014, and interim periods beginning after 15 December 2015. Application prior to the effective date for public business entities is prohibited.

ASU 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

Effective for annual periods beginning on or after 15 December 2014, and interim periods within annual periods beginning on or after 15 December 2015.

ASU 2014-07 Consolidation (Topic 810), Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements

Effective upon adoption of the accounting alternative.(8)

ASU 2014-05 Service Concession Arrangements (Topic 853) Effective for annual periods beginning after 15 December 2014, and interim periods within annual periods beginning after 15 December 2015.

ASU 2014-04 Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure

Effective for annual periods beginning after 15 December 2014, and interim periods within annual periods beginning after 15 December 2015.

ASU 2014-03 Derivatives and Hedging (Topic 815), Accounting for Certain Receive-Variable, Pay-Fixed Interest Rate Swaps — Simplified Hedge Accounting Approach

Effective upon adoption of the accounting alternative.(8)

ASU 2014-02 Intangibles — Goodwill and Other (Topic 350), Accounting for Goodwill

Effective upon adoption of the accounting alternative.(8)

34 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Effective prior to 2016 for nonpublic(7) calendar year-end entities ASU 2014-01 Investments — Equity Method and Joint

Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects

Effective for annual periods beginning after 15 December 2014, and interim periods within annual periods beginning after 15 December 2015.

ASU 2013-11 Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists

Effective for fiscal years, and interim periods within those years, beginning after 15 December 2014.

ASU 2013-06 Not-for-Profit Entities (Topic 958), Services Received from Personnel of an Affiliate

Effective for fiscal years beginning after 15 June 2014, and interim and annual periods thereafter.

ASU 2013-05 Foreign Currency Matters (Topic 830), Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity

Effective for fiscal years beginning after 15 December 2014, and interim and annual periods thereafter.

35

Title Effective date Simplification of Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by Reference on Form S-1 for Smaller Reporting Companies

19 January 2016.

Security-Based Swap Transactions Connected with a Non-U.S. Person’s Dealing Activity That Are Arranged, Negotiated, or Executed By Personnel Located in a U.S. Branch or Office or in a U.S. Branch or Office of an Agent; Security-Based Swap Dealer De Minimis Exception

The rule is effective 19 April 2016, with a compliance date of the later of (a) 21 February 2017 or (b) the SBS Entity Counting Date.

Crowdfunding The rule is effective 16 May 2016. The registration forms for intermediaries became available on 29 January 2016.

Removal of Certain References to Credit Ratings and Amendment to the Issuer Diversification Requirement in the Money Market Fund Rule

The amendments are effective 26 October 2015. The compliance date is 14 October 2016.

Pay Ratio Disclosure The rule is effective 19 October 2015. Registrants will be required to make pay ratio disclosures for their first fiscal year beginning on or after 1 January 2017.

Amendments for Small and Additional Issues Exemptions Under Section 3(b) of the Securities Act (‘Regulation A+’)

19 June 2015.

Credit Risk Retention The new rules are effective 24 December 2015 for residential mortgage-backed securitizations and 24 December 2016 for all other securitizations.

Nationally Recognized Statistical Rating Organizations Certain amendments related to NRSRO were effective as early as 14 November 2014, and others were effective 15 June 2015. The reporting requirements related to ABS third-party due diligence reports were effective 15 June 2015. The first annual report on internal controls from NRSROs is due no later than 90 days after their fiscal year ending on or after 1 January 2015.

Money Market Fund Reform; Amendments to Form PF The rule is effective 14 October 2014. The compliance date for disclosures of significant events on a fund’s website and on new Form N-CR is 14 July 2015. The compliance date for diversification, stress testing and disclosure requirements is 14 April 2016. The compliance date for amendments related to fees, gates and the floating NAV is 14 October 2016.

Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds

21 July 2015, but the Federal Reserve Board gave banking entities a one-year extension (i.e., to 21 July 2016) to conform their ownership interests in and sponsorship of certain covered funds, including collateralized loan obligations. The Federal Reserve Board also announced its intention to grant banking entities an additional one-year extension (i.e., to 21 July 2017) for the same covered funds. In the meantime, banks with significant trading operations will have to report certain quantitative information in phases, based on the size of the entity, with the largest banks reporting by 30 June 2014, and others reporting by 30 April 2016 or 31 December 2016, depending on the size of the bank’s consolidated trading assets and liabilities.

Effective date matrix — final SEC pronouncements and interpretive releases

36 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Title Effective date Improving the Transparency of Audits: Rules to Require Disclosure of Certain Audit Participants on a New PCAOB Form and Related Amendments to Auditing Standards

Disclosure of the name of the audit partner will be required for auditors’ reports issued on or after 31 January 2017, or three months after SEC approval of the rules, whichever is later (pending approval by the SEC). Disclosure of other accounting firms participating in the audit will be required for auditors’ reports issued on or after 30 June 2017 (pending approval by the SEC).

Rules to Implement the Reorganization of PCAOB Auditing Standards and Related Changes to PCAOB Rules and Attestation, Quality Control, and Ethics and Independence Standards

Effective as of 31 December 2016.

Auditing Standard No. 18, Related Parties and Amendments to Certain PCAOB Auditing Standards Regarding Significant Unusual Transactions and Other Amendments to PCAOB Auditing Standards

Effective for audits of financial statements for fiscal years beginning on or after 15 December 2014, including reviews of interim financial information within these fiscal years.

Amendments to Conform the Board’s Rules and Forms to the Dodd-Frank Act and Make Certain Updates and Clarifications

The amendments to Forms 1, 1-WD, 3 and 4 will take effect on 1 July 2014. The amendments to Form 2 will take effect 1 April 2015.

Auditing Standard No. 17, Auditing Supplemental Information Accompanying Audited Financial Statements

Effective for reports on supplemental information that accompanies financial statements for fiscal years ending on or after 1 June 2014.

Attestation Standard No. 1, Examination Engagements Regarding Compliance Reports of Brokers and Dealers

Effective for examination engagements of fiscal years ending on or after 1 June 2014.

Attestation Standard No. 2, Review Engagements Regarding Exemption Reports of Brokers and Dealers

Effective for review engagements of fiscal years ending on or after 1 June 2014.

Auditing Standard No. 16, Communications with Audit Committees

Effective for audits of financial statements for fiscal years beginning on or after 15 December 2012.

Effective date matrix — final PCAOB pronouncements and rules

37

Title Effective date SAS No. 131, Amendment to Statement on Auditing Standards No. 122 Section 700, Forming an Opinion and Reporting on Financial Statements

Effective for audits of financial statements for periods ending on or after 15 June 2016.

SAS No. 130, An Audit of Internal Control Over Financial Reporting That Is Integrated With an Audit of Financial Statements

Effective for integrated audits for periods ending on or after 15 December 2016.

SSARS No. 21, Statements on Standards for Accounting and Review Services: Clarification and Recodification

Effective for reviews, compilations and engagements to prepare financial statements for periods ending on or after 15 December 2015.

Effective date matrix — final ASB standards

38 First Quarter 2016 Standard Setter Update Financial reporting and accounting developments

Title Effective date Statement No. 81, Irrevocable Split-Interest Agreements Effective for reporting periods beginning after 15 December 2016. Earlier

application is encouraged. Statement No. 80, Blending Requirements for Certain Component Units — an amendment of GASB Statement No. 14

Effective for reporting periods beginning after 15 June 2016. Earlier application is encouraged.

Statement No. 79, Certain External Investment Pools and Pool Participants

Effective for reporting periods beginning after 15 June 2015, except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing, which are effective for reporting periods beginning after 15 December 2015. Earlier application is encouraged.

Statement No. 78, Pensions Provided Through Certain Multiple-Employer Defined Benefit Pension Plans

Effective for reporting periods beginning after 15 December 2015. Earlier application is encouraged.

Statement No. 77, Tax Abatement Disclosures Effective for financial statements for periods beginning after 15 December 2015. Earlier application is encouraged.

Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments

Effective for financial statements for periods beginning after 15 June 2015. Earlier application is permitted.

Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions

Effective for fiscal years beginning after 15 June 2017. Earlier application is encouraged.

Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans

Effective for financial statements for fiscal years beginning after 15 June 2016. Earlier application is encouraged.

Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68

Effective for financial statements for fiscal years beginning after 15 June 2016: requirements that address accounting and financial reporting by employers and governmental nonemployer contributing entities for pensions that are not within the scope of Statement 68. Effective for fiscal years beginning after 15 June 2015: requirements that address financial reporting for assets accumulated for purposes of providing those pensions. Effective for fiscal years beginning after 15 June 2015: requirements that amend Statements 67 and 68. Earlier application is encouraged.

Statement No. 72, Fair Value Measurement and Application

Effective for financial statements for reporting periods beginning after 15 June 2015. Earlier application is encouraged.

Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date — an amendment of GASB Statement No. 68

Effective simultaneously with the provisions of Statement 68, for fiscal years beginning after 15 June 2014. Earlier application is encouraged.

Statement No. 68, Accounting and Financial Reporting for Pensions — an amendment of GASB Statement No. 27

Effective for financial statements for fiscal years beginning after 15 June 2014. Earlier application is encouraged.

Effective date matrix — final GASB pronouncements

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