2019 AICPA Conference on Current SEC and PCAOB Developments Recap

The AICPA held its 2019 conference on Current SEC and PCAOB Developments in Washington D.C. from December 9-11.  The Conference provided insight and perspective related to financial reporting and trends impacting the accounting, auditing, financial reporting and other matters.

Throughout the three-day conference, trending topics dominated the discussions including:  critical audit matters (CAMs); auditor independence; new FASB standards on revenue recognition, leases and credit losses; non-GAAP measures; interest rate reform; cybersecurity; and audit quality.  The overarching theme throughout each discussion was the impact of technology on the accounting, reporting and auditing profession.

In this article, we are going to take a deeper dive into interest rate reform. 

In his address, SEC Chairman Jay Clayton and SEC Chief Accountant Sagar Teotia discussed interest rate reform, with LIBOR expected to go away in 2021.  They indicated that the transition is expected to be difficult and cautioned registrants that “the risks associated with this expected discontinuation and transition will be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner.”  Mr. Clayton encouraged companies to begin assessing their risks associated with rate reform and adjust contracts accordingly.

Additionally, representatives from the Office of the Chief Accountant (OCA) gave an update on their activities related to reference rate reform as it pertains to hedging activities, specifically cash flow hedges.  The OCA discussed how the transition away from LIBOR would impact the assessment of hedge effectiveness of a cash flow hedge of LIBOR-based debt.  The OCA referenced the FASB’s proposed ASU that would provide for optional guidance for a limited time allowing companies to change to another reference rate while not impacting the status of the hedging instrument. 

For more information on the conference or interest rate reform, please contact a member of the Schneider Downs SEC and Public Company Industry Group.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2021 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

Data and Technology Research Project Spotlight
SEC Oversight – Helping Investors during a Time of Uncertainty and Confusion
PCAOB Releases Staff Spotlight Reminding Audit Firms of Responsibilities During COVID-19 Crisis
SEC Issues Compliance and Disclosure Interpretations Related to COVID-19 Public Filing Extension
SEC Releases COVID-19 Disclosure Obligations Staff Guidance
Audit Firm Inspections Delayed by the PCAOB Due to COVID-19

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222

p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215

p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102