Pwc asc 360 guide. , under ASC 360, Property, Plant, and Equipment).

Pwc asc 360 guide DH 1 – DH 4 discuss derivatives, including the definition of a derivative in ASC 815, Derivative Instruments and Hedging Activities, scope exceptions to ASC 815, and guidance on embedded derivatives. The ongoing cost for CCA services is expensed as the service is received similar to other service contracts. 3. As Whether and when a company should discontinue application of the normal purchases and normal sales scope exception partially depends on the form of net settlement (see Figure DH 3-4 in section DH 3. Management should determine the asset groups from the perspective of the carve-out business as they may be different than the parent entity’s ASC 805 and ASC 944 provide some insurance-specific guidance for business combinations. updated to reflect the “portfolio exception” applicable to nonfinancial items accounted for as derivatives under ASC 815. ASC 326-20 applies to net investments in leases associated with sales-type leases and direct financing leases. In certain instances, a contract may be partially within the scope of ASC 606 and partially within the scope of ASC 944 or financial instrument guidance, such as a high deductible policy that also contains claims handling services. This information is intended to help users of the financial statements (1) better understand the reporting entity’s performance, (2) better assess The most significant impact of the new leases standard is that lessees will recognize both a lease liability and a related asset on their balance sheet for virtually all leases. The content that was formerly in TX 1. If an income approach is used to measure the fair value of the asset group, the cash flows should be based on market Under ASC 360-10, the accounting and reporting for long-lived assets differ depending on what the entity intends to do with them. The costs relate directly to a contract or an anticipated contract that the entity can specifically identify (for example, costs relating to services to be provided under the renewal of an existing contract or costs of designing an asset to be transferred under a specific contract that has not yet been approved). The disclosure requirements of ASC 275 are applicable to potential near-term impairments of long-lived assets accounted for under ASC 360. The first four chapters provide an introduction and guidance on determining whether an arrangement is (or contains) a lease and how to classify and account for lease and nonlease components. Perhaps most importantly, ASC 860 prescribes the conditions that a transfer must satisfy to allow the transferor to derecognize the financial asset from its The general rules used in accounting for PP&E for NFPs are similar to business entities. See RR 2. However, the accounting for transaction costs ASC 360-10-35-21 includes examples of events or changes in circumstances that may indicate an impairment for definite lived intangibles and even when a noncontrolling investment is retained. This Roadmap provides Deloitte’s insights into the guidance in ASC 360-10 and ASC 205-20. , Excel) for lease accounting; PwC is a trusted resource for helping companies navigate the accounting and financial reporting challenges of This guide focuses on bankruptcy and liquidation-basis accounting and financial reporting considerations. Under ASC 810, this loss of DH 1 – DH 4 discuss derivatives, including the definition of a derivative in ASC 815, Derivative Instruments and Hedging Activities, scope exceptions to ASC 815, and guidance on embedded derivatives. FASB issued its standard on leases, ASC 842, which will replace today’s leases guidance in 2019. Although the guidance in IFRS 2 and ASC 718 is similar, there are several differences. with customers guide . Common control leasehold improvements are subject to the long-lived asset impairment guidance in ASC 360-10-40-4, considering the useful life to the common control group. RR 2. This right-of-use asset is subject to the same asset impairment guidance in ASC 360, Property, Plant, and Equipment, that is applied to other property, plant, and equipment. Question RR 2-4 was added to . to address whether fiscal As outlined in ASC 980-10-15-2, a reporting entity is required to apply ASC 980 if it meets three specified criteria. That guidance explicitly excludes capital projects constructed for a reporting entity’s own use. 1A In the power and utilities industry, it is established practice that joint plant is accounted for using proportionate consolidation. 2) ASC 360-10-45-9(a) requires that management, having the authority to approve the action, must commit to a plan to sell the asset (disposal group). IE11 through IFRS 13. PwC response No. For All references to the guides are to the latest editions noted in the PwC guide library. Similarly, derivative instruments that have been separated from a host contract are outside the scope of ASC 320. An investor increases the carrying amount of the investment to reflect its contributions and its share of the investee’s earnings and reduces it to reflect its share of investee’s losses, investee distributions, and other-than-temporary impairments. ” It is In some instances, guidance was cited with minor editorial modification to flow in the context of the PwC Guide. This guide summarizes the applicable accounting literature, including relevant references was updated to remove reference to ASC 840 since ASC 842s i now effective for all entities. Under ASC 810-10-15, consolidation of a majority-owned subsidiary is precluded where control does not rest with the majority owners—for instance, where the subsidiary is in legal reorganization or bankruptcy. ASC 360-10-05-3 During our webcast, we shared key accounting and reporting reminders, including those discussed at the AICPA & CIMA Conference on Current SEC and PCAOB Developments, as companies closed out the year. The CECL impairment model is applicable to lessors for certain types of leases. Our 25+ years of experience and expertise has helped countless FORTUNE 100, A component is defined in ASC 205-20-20. 11, BCG 2. ASC 360-10 specifies the accounting and reporting for long-lived assets that are being held Operating leases were not recognized on balance sheet and therefore did not have recognized assets that would be subject to ASC 360. Such contracts would be in the scope of ASC 606. Built-in overhaul (ASC 908-360-30-2 and ASC 908-360-35-5) When overhaul costs are included or combined with other costs, a reporting entity would segregate costs into components that (1) are depreciated over the useful life of the asset and (2) require overhaul at periodic intervals. Long-lived asset impairment under ASC 360, Property, Plant, and Equipment (PwC’s Financing Transactions guide) Derivative and hedging considerations under ASC 815, Derivatives and Hedging (PwC’s Derivatives and Hedging guide) Going concern considerations under ASC 205-40, Presentation of Financial Statements, Going Concern ; Subsequent event Transactions with customers are addressed in PwC’s guide, Revenue from contracts with customers. Obligations of a lessee in connection with an underlying asset, whether imposed by a lease or by a party other than the lessor, that meet the definition of either lease payments or variable lease payments in Subtopic 842-10. The carrying amount of the asset (disposal group) should be adjusted each reporting period for The provisions of ASC 410-20 do not apply to obligations that result from improper operation of an asset, including environmental remediation liabilities, which are subject to ASC 410-30, Asset Retirement and Environmental Obligations – Environmental Obligations. Enabled by data and technology, our services and solutions provide trust through assurance and help clients transform, grow and operate. ; DH 5 – DH 9 address the requirements for applying hedge accounting and provide guidance on the specific requirements for hedges of financial, nonfinancial and foreign The DD&A or other depletion category includes amounts within the scope of ASC 932-360, Extractive Activities—Oil and Gas—Property and SEC provides greater clarity on new segments guidance as well as chapter 25 of our Financial statement presentation guide. 16. A gain or loss recognized (see Subtopic 610-20 on the sale or transfer of a nonfinancial asset) on the sale of a long-lived asset (disposal group) that is not a discontinued guide PwC is pleased to offer our accounting and financial reporting guide for Revenue from contracts with customers. The distinction is important as it can have a significant effect on the timing of recognition of the cost of those benefits. Latest edition: KPMG in-depth guide to impairment testing, covering the models in ASC 350-20, ASC 350-30 and ASC 360. PwC • Start-up activities are defined as, “those one-time activities relating to opening a new facility, introducing a new product or service, For a component to qualify as a discontinued operation at the balance sheet date, it must be disposed of (e. This guide discusses the identification of investments that are subject to the equity method of consider the following characteristics outlined in ASC 323-10-15-13: Subordination (see EM 1. Certain aspects of the amendments in Update Investments outside the scope of ASC 320 include investments that are derivative instruments, in their entirety, subject to the requirements of ASC 815. 3 of PwC’s Derivatives and hedging guide). To recognize a gain or loss from the transfer of nonfinancial assets or in substance nonfinancial assets within the scope of this Subtopic, an entity shall apply the guidance in Topic 810 on consolidation and in Topic 606 on revenue from contracts with customers as described in paragraphs 610-20-25-2 through 25-7. Although many view the accounting for property, For guidance on assets acquired through a business combination refer to PwC’s Business combinations and noncontrolling interests guide. An Accounting Standards Update is not authoritative; it only provides background information about an issue, updates the Accounting Standards Codification, and provides the basis for conclusions for the The right-of-use asset is tested for impairment in accordance with ASC 360 Lease expense is recorded on a straight-line basis over the lease term by adding interest expense determined using the effective interest method to the amortization of the right-of-use asset. 1 was updated to provide additional presentation and disclosure requirements for crypto assets in scope of ASC 350-60 and to include reference to the AICPA’s Digital Assets Practice Aid for examples of disclosures that may be applicable to the lender in a crypto lending arrangement. The useful life assessment of a long-lived asset is based on entity-specific assumptions about how the entity intends to use the asset, which may be different from market-participant The derecognition of nonfinancial assets and in substance nonfinancial assets for transactions with non-customers is codified in ASC 610-20. . When deliberating ASC 420-10, the FASB discussed whether a definition of restructuring should be developed, but believed an operational definition of restructuring for accounting purposes was not feasible. 3 was updated with additional information on the application of the guidance in ASC 360-10-45 for the recognition of foreclosed property. ? Rates are established by an This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. ; DH 5 – DH 9 address the requirements for applying hedge accounting and provide guidance on the specific requirements for hedges of financial, nonfinancial and foreign Such contracts would be in the scope of ASC 606. This As discussed in ASC 740-10-15-2, ASC 740’s principles and requirements apply to domestic and foreign entities, including not-for-profit (NFP) entities with activities that are subject to income taxes, ASC 958-360 provides guidance on the accounting for works of art, historical treasures, and similar assets which have aesthetic, cultural, or historical significance and are employed in an NFP’s day-to-day operations. It requires a reporting entity that makes certain types of guarantees to recognize a liability generally measured initially at fair value, and to make a number of specified disclosures. Resources. However, if an investment in the scope of ASC 320 contains an embedded derivative that is required to be separated, the 360-10-55-21 An entity owns a manufacturing facility that together with other assets is tested for recoverability as a group. context of the PwC Guide. Revisions made in March 2022 FV 2, Scope FV 2. 2. 8. The latest edition adds new guidance on the assignment of goodwill to a disposal group, the elimination of intercompany balances with a discontinued operation and other presentation matters. 3, BCG 2. Under ASC 230-10-15-4, defined benefit pension plans that follow ASC 960 and other employee benefit plans that present financial information similar to that required by ASC 960 are exempt from the requirement to provide a statement of cash flows with their annual financial statements. 2 Changes to common control group. Definitions, full paragraphs, and excerpts from the FASB’s Accounting Standards Codification are As a result, the FASB issued ASC 606, Revenue from Contracts with Customers, and ASC 340-40, Other Assets and ASC 610-20-25-1. PwC’s Foreign currency guide • ASC 720-15-15, “Start-up Costs” provides guidance on the financial reporting of the start-up costs. PwC’s guide Property, plant, equipment and other assets (PPE) summarizes %PDF-1. In general, utilities have followed proportionate us Utilities guide . 7 %âãÏÓ 21565 0 obj > endobj 21582 0 obj >/Filter/FlateDecode/ID[4BFA4EF8DAC71340A1E00E8DD52C18F0>]/Index[21565 396]/Info 21564 0 R/Length 122/Prev 4931084 joint ventures guide PwC is pleased to offer the first edition of our Equity method investments and joint ventures guide. to address EY helps clients create long-term value for all stakeholders. pwc Prepaid rent assets should then be reclassified to the right-of-use asset on the lease commencement date. References to other guides are indicated by the applicable guide FG 5. Most significantly, asset acquisitions are ASC 360-10-35-21 provides several examples of events or changes in circumstances that management should consider when assessing whether an intangible asset should be tested for impairment. In some instances, guidance was cited with minor editorial modification to flow in the context of the PwC Guide. ASU 2016-13 requires the use of the current expected credit losses (CECL) impairment model for a broad scope of financial instruments, ASC 360-10-35-21 provides examples of such impairment indicators. 6). 15, BCG 2. ASC 718 uses the term probable in a manner consistent with its definition in ASC 450, Contingencies, which refers to an event that is likely to occur (ASC Master Glossary). TX 1. Explore the Roadmap library in the Deloitte Accounting Research Tool In such situations, other assets, or asset groups, should be tested for impairment under their respective standards (e. ASC 980 provides guidance for (1) determining whether a reporting entity has regulated operations subject to rate-regulated accounting and (2) accounting for certain assets, liabilities, and transactions arising from regulated operations. 7. The guidance in ASC 970-360 and ASC 970-340 is specific to reporting entities in the real estate industry that are in the business of constructing In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. References to US GAAP . PwC is pleased to offer our accounting and financial reporting guide for . This edition of On the Radar maps out the decision process and highlights key considerations for As mentioned above, ASC 360 is a standard that has been established by the Financial Accounting Standards Board (FASB) in the United States. Revisions made in May 2024. Editor’s note: For impairment considerations related to transition, please see this previous edition: Can prior impairments or exit cost accruals impact lease transition? Under prior lease guidance, only capital leases were recognized on balance sheet and therefore subject to the impairment guidance in ASC 360, Property, Plant, and This Roadmap provides Deloitte’s insights into the guidance in ASC 360-10 and ASC 205-20. Whether and when a regulated utility no longer meets the criteria for application of rate-regulated accounting for all or a portion of its operations is highly judgmental. Those obligations shall be accounted for by the lessee in accordance with the requirements of Subtopic 842-10. was added to . The remaining text is PwC’s original content. Issues such as asset groupings and allocations of losses are beyond the scope of this guide. ASC 860, Transfers and Servicing, provides comprehensive guidance to assist a transferor of financial assets to account for transactions that involve a transfer of a recognized financial asset or an interest therein. This publication is designed to alert companies, investors, and other capital market participants to the SD 17 was added to provide guidance comparing and contrasting ASC 848, Reference rate reform, to the Phase 1 and Phase 2 IBOR reform The form of the instrument and the relevant jurisdiction should be considered when evaluating whether it meets the definition of a security under ASC 321. e. 1). ASC 360-10 specifies the accounting and reporting for long-lived assets that are being held and used by an entity and for long-lived assets that the entity intends to sell or otherwise dispose of. References to other PwC guidance This guide provides general and specific references to chapters in other PwC guides to assist users in As discussed in ASC 740-10-15-2, ASC 740’s principles and requirements apply to domestic and foreign entities, including not-for-profit (NFP) entities with activities that are This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. 2A was removed. Thus, the right-of-use asset is increased for any lease payments made by a lessee at or before the lease commencement date and decreased for any lease incentives received by a lessee (or paid by the lessor to third parties on behalf of the lessee) at or before guide PwC is pleased to offer our updated IFRS and US GAAP: similarities and differences guide. 17 was updated for ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements. It supplements information provided by the authoritative accounting literature and other PwC guidance. The objectives of ASC 610-20 are to (1) generally align the accounting for transfers of nonfinancial assets to non-customers with the accounting for contracts with customers under ASC 606 and (2) provide specific guidance for ASC 360-10 provides guidance on accounting and reporting on property, plant, and equipment, including accumulated depreciation. KPMG explains when and how to apply the discontinued operations guidance in ASC 205-20 and held-for-sale guidance in ASC 360-10. 4 for further guidance on identifying the customer in a contract. Design and development costs for products to be sold under long-term supply arrangements shall be expensed as incurred. This guide also discusses the modification, remeasurement, and Certain changes to the regulatory or competitive environment in which a regulated utility operates may result in the regulated utility no longer qualifying for application of ASC 980 to all or certain portions of its operations. IE14) provide an example of the application of the ASC 820 framework in an impairment analysis. The ASU also provides updated guidance for the impairment of available-for-sale ASC 360-10 provides guidance on accounting and reporting on property, plant, and equipment, including accumulated depreciation. because it is a long-lived tangible asset that meets the definition of property, plant, and equipment in ASC 360-10-05-3. 2, reporting entities constructing assets for sale or rental should consider the additional guidance provided by ASC 970-360 and ASC 970-340. In addition to the general considerations for capitalization discussed in PPE 1. The held for sale criteria in ASC 205-20-45-1E are the same six criteria as those set Most companies have recently adopted ASC 842, Leases. Irrespective of whether the package of practical expedients is elected, reporting entities will need to apply the The subsequent accounting for an equity method investment generally follows the consolidation model. The other PwC guides referred to in this guide, including their abbreviations, are: The primary source of existing FASB authoritative guidance on inventory is ASC 330, Inventory. , ASC 360-10, ASC 350-30, and ASC 323-10) and the other assets’ or asset groups’ carrying amounts should be adjusted for impairment before testing goodwill for impairment in accordance with ASC 350-20-35-31. Items of property, plant, ASC 360 provides guidance for presentation and disclosure of long-lived assets. ASC 350 addresses impairment of indefinite-lived intangible assets. 1 (after adoption of ASC 842) and FX 4. Accordingly, when a subsidiary files for bankruptcy, it is usually appropriate for a solvent parent to deconsolidate the subsidiary. Property, plant, and equipment (sometimes referred to as “fixed assets,” “tangible long lived assets,” or “plant assets”) are tangible property used in a productive capacity that will benefit the reporting entity for a period exceeding one year. The nuclear fuel life cycle covers the period of mining the uranium, converting it into fuel, using it to produce electricity, and disposing of the “spent” or used nuclear fuel. This section addresses impairment guidance related to construction work in progress and utility plant. References to other PwC guidance. C, Jointly Owned Electric Utility Plants, codified in ASC 980-360-S99-1, discusses the accounting for typical utility joint plant arrangements and requires certain related disclosures (see UP 15. It applies to both developmental stage entities and established operating stage entities. 7 to address whether fiscal funding clauses affect the determination of the contract term. Definitions from ASC 830-10-20. 2014-09, Revenue from Contracts with Customers (Topic 606), raised new questions about the interaction between Topic 808 and Topic 606. Under the standard, lessees are required to reflect virtually all leases on the balance sheet. 1. , under ASC 360, Property, Plant, and Equipment). 4 was moved to FV 6. We note that you performed an annual goodwill impairment test as of December 31, 2022, and recognized a goodwill impairment charge, which was driven by the reduction of the market value of your stock price in December 2022. However, when a statement of cash flows would provide Any initial amount of contingent consideration recorded on the acquisition date is included in the initial cost of the assets acquired, and subsequent changes in the recorded amount of contingent consideration are generally recognized as an adjustment to the cost basis (see ASC 323-10-35-14A, ASC 360-10-30-1, and ASC 450-20-25-2). , liability or equity), as well as the accounting required when awards are About the Income taxes guide PwC is pleased to offer our updated comprehensive guide on the accounting for income taxes. They include land, buildings, machinery, furniture, and tools. The Roadmap series provides comprehensive, easy-to-understand guides on applying FASB and SEC accounting and financial reporting requirements. ASC 360, Property, Plant, and Equipment is the authoritative US GAAP for PP&E and defines property, plant, and equipment as follows: ASC 360-10-05-3. In accordance with ASC 360-10-05-2, the general subsections address property, plant, and equipment, including accumulated depreciation, while the impairment or disposal subsections provide additional guidance for the impairment or disposal of long-lived assets, which may include property, guide PwC is pleased to offer our accounting and financial reporting guide for Revenue from contracts with customers. 11. See PPE 5. The definition in ASC 321 was based on the Uniform Commercial Code at the time the guidance was developed more than 20 years ago, but may not be consistent with the legal definition of a security today. Property, plant, and equipment are tangible property used in a productive capacity that will benefit the reporting entity for a period exceeding one year. , through sale, abandonment, or spin-off), or meet the held-for-sale criteria of ASC 360-10-45-9. Revenue from contracts with customers (ASC 606) Software costs ; Stock-based compensation ; Sustainability reporting ; Transfers and servicing of financial assets ; group is to be tested for impairment under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 on property, plant, and equipment (thus potentially requiring a goodwill Latest edition: KPMG in-depth guide to impairment testing, covering the models in ASC 350-20, ASC 350-30 and ASC 360. That guidance is similar to the guidance for the costs of acquiring other long-lived assets with respect to which costs are capitalized and how the costs are subsequently amortized and tested for impairment. Determining whether a transaction represents an asset acquisition or a business combination is a critical step as there are significant differences in the accounting. CCA includes a ASC 805-50-30-2 specifically provides ASC 845 and ASC 610-20 as examples of other US GAAP that may apply to these transactions (see PPE 2. The plan should specifically identify (1) all major assets to be disposed of, (2) significant actions to be taken to complete the plan, including the method of disposition and location of those activities, and (3) the expected instances, guidance was cited with minor editorial modification to flow in the context of the PwC Guide. As described in ASC 718-10-15, ASC 718 applies to all equity-based compensation when a company In accordance with ASC 350-30-45-2, an impairment loss that an entity recognizes for an indefinite-lived intangible asset should be reported as a component of income from continuing operations before income taxes or discontinued operations, as appropriate. Figure IG 12-1 has an index of the industry specific guidance. 1) describes “ready for its intended use” as follows. This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. Those financial statements reflect any of the following: The financial statements of one or more foreign operations by combination, consolidation, or us Financing guide . 3 was updated to address the Conversely, in accordance with ASC 360-10-45-12, if a creditor has the ability and intention to sell the real estate acquired, the sale is probable to occur within one year and all of the other criteria for held for sale classification in ASC 360-10-45-9 have been met or are probable of being met within a short period of time, the foreclosed property should be classified as held for sale. Although the lack of guidance for collaborative arrangements has resulted in diversity in practice for more than a decade, the issuance of Accounting Standards Update No. The acquirer is required to consider all acquired insurance contracts (including reinsurance contracts) as if they were new An entity that applies this method must provide the required disclosures under ASC 840 for all periods to which ASC 840 is applied. As noted in ASC 835-20-25-5 and ASC 350-40-25-14, interest capitalization should cease and depreciation should begin when the long-lived asset is substantially complete and ready for its intended use. o address CCA is solely a service: Although the reporting entity is not acquiring software in this situation, the determination of whether to capitalize the related implementation costs is based on the internal-use software guidance, as discussed in SW 4. The effective interest rate is defined in ASC 326-20-20. ASC 360-10 provides guidance on accounting and reporting on property, plant, and equipment, including accumulated depreciation. Long-lived assets are capitalized, classified as held-and-used or held-for-sale, depreciated over their estimated useful lives, and tested for impairment in accordance with ASC 360, Property, plant, and equipment. ASC 360, Property, Plant, and Below we highlight three scenarios that companies may need to consider. which are subject to the guidance in ASC 350 and ASC 360, respectively. 4 was moved to TX 18. Those financial statements reflect any of the following: The financial statements of one or more foreign operations by combination, consolidation, or ASC 360-10 offers guidelines on how to address the accounting treatment for property, plant, and equipment. This can happen when a lessee is deemed the accounting owner of an asset When testing for impairment, ASC 360, Property, Plant, and Equipment, requires assets to be grouped at the lowest level for which identifiable cash flows are largely independent of cash flows from other assets and liabilities. Design and development costs for molds, dies, and other tools that a supplier will own and that will be used in producing the products under a long-term supply arrangement shall be capitalized as part of the molds, dies, and other tools This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. Some of the events or changes in circumstances include: a significant decrease in the market price of the long-lived asset, a significant adverse change in the manner in which PwC is pleased to offer our updated Leases guide that discusses lessee and lessor accounting under ASC 842. References to other guides are indicated by the applicable guide abbreviation followed by the specific section number. KPMG us Utilities guide . ASC 820, Example 3, Case A (ASC 820-10-55-36 through ASC 820-10-38A) and IFRS 13, Example 4 (IFRS 13. The chapters in this guide discuss both lessee and lessor accounting by topic. Under new guidance, however, lessees will recognize virtually all leases on balance sheet. Further, because ASC 350-60 does not address the accounting for transaction costs incurred to acquire crypto assets, we believe a reporting entity will generally capitalize transaction costs based on the guidance in ASC 350-30-30-1 and ASC 805-50-30-1 through ASC 805-50-30-4 for crypto assets acquired individually or in a group. and other assets guide PwC is pleased to offer our updated accounting and financial reporting guide for Property, plant, equipment and other assets. An indefinite-lived intangible asset is considered impaired when the asset’s carrying amount is greater than its fair value. 1 was updated to clarify the applicability of ASC 820 within lease accounting guidance. Determining system versus manual process (e. 3 Awards within the scope of ASC 718 . ; BCG 2. ; Discussion of the exposure draft issued by the AICPA Although not defined, we believe the use of the term “useful economic life” in ASC 360-10-35-4 is intended to have the same meaning as “useful life,” as defined in the ASC Master Glossary. About the Fair value guide FV 6, Application to financial assets and financial liabilities The content formerly in FV 6. References to other PwC guidance This guide provides general and specific references to chapters in other PwC guides to assist users in interests guide. A reporting entity’s assessment of whether a component qualifies for discontinued operations reporting should occur when the component initially meets the criteria to be classified as held for sale in accordance with ASC 205-20-45-1E. It should be noted that ASC 840 includes interpretative guidance under which a lessee would record an asset subject to lease as if it were the legal owner. This guide explains the fundamental principles of accounting for all types of stock-based compensation, including which arrangements are subject to its scope, measurement date, vesting conditions, expense attribution, and classification (i. In addition, PwC’s Accounting and reporting manual (the ARM) ASC 948-310-30-1. The other PwC guides referred to in this guide ASC 280-10-15-3. 4A and a new FV 6. ASC 326-20-30-4 states that when using a DCF method, an entity should discount expected cash flows at the financial asset’s effective interest rate. Scope of ASC 740. 5. However, a reporting entity should not base its conclusion on the Although a gain or loss on this type of sale generally does not meet the definition of revenue (and, therefore, would not be presented as revenue), a reporting entity should apply the guidance in the revenue standard to determine whether the parties are committed to perform under the contract and therefore whether a contract exists (refer to RR 2. ASC 420-10 does, however, indicate that an exit activity includes, but is not limited to, a restructuring as defined in International Accounting Standard About the Income taxes guide PwC is pleased to offer our updated comprehensive guide on the accounting for income taxes. 6. ASC 360-10-45-5. See Chapter 8 in PwC’s Foreign currency guide for additional information regarding this determination. For more PwC accounting and reporting content, visit us at viewpoint. The FASB recognized that these receivables include both financial and non-financial elements, but concluded that the application of a single impairment model to the recognized lease asset In response to the financial crisis of 2008, the FASB was tasked with revisiting the accounting model for impairments of financial assets, resulting in the issuance of ASU 2016-13, Financial Instruments — Credit Losses (codified in ASC 326). This guide summarizes the applicable accounting literature, including relevant references financial reporting outcomes will be similar despite the use of different wording in ASC 606 and IFRS 15. The PwC guides should be read in conjunction with the applicable authoritative accounting literature. 2 for impairment guidance. Further, impairment testing is performed when a triggering event has been identified for the asset group or for an individual asset included in the broader asset group (if References to other PwC guidance This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. The objective of ASC 280, Segment Reporting, is to provide information about the different types of business activities in which a reporting entity engages and the different economic environments in which it operates. This edition of On the Radar maps out the decision process and highlights key considerations for The guidance for the costs to be capitalized when acquiring PP&E can be found in ASC 360-10. However, if obligations of a Definitions from ASC 830-10-20. During this period, Manufacturing Corp would apply the guidance in ASC 360-10-40-3C to determine the appropriate amount of ASC 970, Real Estate - General, includes incremental guidance on capitalizing the costs of real estate developed for sale or rental. Reporting Currency: The currency in which a reporting entity prepares its financial statements. Que 2-4. Lease assets recognized under the new standard are subject to ASC 360 only at, or after, the time they are recognized on the Company’s balance sheet. Questions after that were renumbered accordingly. The guidance in this Subtopic does not apply to the following entities: Parent entities, subsidiaries, joint ventures, or investees accounted for by the equity method if those entities’ separate company statements also are consolidated or combined in a complete set of financial statements and both the separate company statements and the consolidated or Accordingly, University should account for the underlying asset during the construction period similar to any other owned asset under construction (i. ASC 360, Property, Plant, and Equipment is the authoritative US GAAP for The other PwC guides referred to in this guide, including their abbreviations are: Derivatives and hedging (DH) Fair value measurements, global edition (FV) Financial statement presentation (FSP) Financing transactions (FG) Loans and Investments (LI) Figure TS 3-1 was updated to clarify the interaction between the guidance in ASC 610-20, Other Income – Gains and Losses Observations from the front lines. As described in ASC 718-10-15, ASC 718 applies to all equity-based compensation when a company us PwC Leases guide 8. 5 was added to discuss the guidance in ASC 480-10-15-7E for certain mandatorily redeemable noncontrolling interests. 3A, and BCG 2. However, in the absence of other authoritative guidance, utilities and power companies often apply the guidance in ASC 970 by analogy in developing their About the Revenue from contracts with customers guide Revisions made in November 2023 Chapter 2, Scope and identifying the contract RR 2. KPMG Executive Education has developed and delivered over 1,000 internal and external programs on trending topics and emerging issues in the accounting and finance industry, taught by KPMG leaders, industry specialists, and highly regarded academics from prestigious universities. The acquirer is required to consider all acquired insurance contracts (including reinsurance As defined in ASC 360-10, impairment exists when the carrying amount of an asset (or asset group) exceeds its fair value. generally accepted accounting principles. 20X1 to December 31, 20X1 has been excluded. We believe the impairment loss should be included in the subtotal “income from operations,” if presented. ASC 340-10-25-1. ASU 2016-13 introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. This guide assumes adoption of ASC 606, Revenue from Contracts with Customers. Reporting Entity: An entity or group whose financial statements are being referred to. S. An Accounting Standards Update is not authoritative; rather, it is a document that communicates how the Accounting Standards Codification is being amended. This through ASC 740-20-45-18 when an entity has a change in valuation allowance related to a DTA for unrealized losses on available-for-sale debt securities. 4. Additionally, when a reporting entity acquires assets by issuing equity interests to the seller, the reporting entity can elect to apply the measurement guidance in ASC 805-50 or the guidance in ASC 718. 1) Risks and rewards of ownership (see EM 1. Financial instruments accounted for under the CECL model are permitted to use a DCF method to calculate the allowance for credit losses. 5). As summarized in Figure UP 18-2, the recognition and measurement models vary depending on whether the Refer to ASC 350-20-35-3C, ASC 350-20-35-22 to 24, and ASC 350-20-35-30. stion RR . PwC is pleased to offer our updated accounting and financial reporting guide for Property, plant, equipment and other assets. ; As ASC 326 is effective for all entities, BCG 2. As the operations were not transferred to Parent Entity until October 30, 20X1, the operations are not considered to be disposed of as of September 30, 20X1. Although many view the accounting for property, plant, and equipment Although ASC 360-10-05-3 defines PP&E, it does not include any specific guidance for capitalization of costs incurred during the development of self Once all the criteria in ASC 360-10-45-9 are met, a long-lived asset (disposal group) should be classified as held for sale and the disposal group should be reported at the lower of its carrying value or fair value less cost sell beginning in the period the held for sale criteria is met. SAB Topic 10. g. LI 5, ASC 805 and ASC 944 provide some insurance-specific guidance for business combinations. We also provided a post-election update for business leaders, insights on responsible AI, and more. More specifically, this outlines impairment testing for long-lived assets. 1. The proposed PPE SOP (see PPE 1. 4 was added to reflect the impact of ASU 2022-03. When applying Step 2 of the impairment test under ASC 360, the fair value of a capital lease asset should be estimated in accordance with ASC 820. This means that the standard forms part of the Generally Accepted Reportable segment-level asset information regularly provided to the CODM is required to be disclosed and included in the 10% asset test calculation consistent with ASC 280-10-55-12 through ASC 280-10-55-15, which indicates that items required by paragraph ASC 280-10-50-22 and ASC 280-10-50-25 that are regularly provided to the CODM must be disclosed. the accounting for a change in classification is not discussed in this guide. This chapter addresses these requirements, the discontinuation of application and reapplication of ASC 980, and related presentation and us Financial statement presentation guide . Revisions made in March 2023 . Revenue from contracts with customers. Excerpt from ASC 360-10-30-1 [T]he historical cost of acquiring an asset includes ASC 360-10-35-4 defines depreciation accounting as “a system of accounting which aims to distribute the cost or other basic value of tangible capital assets, less salvage (if any), over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. Testing nonfinancial assets for impairment can be challenging – ASC 360-10-35-21 provides several examples of events or changes in circumstances that management should consider when assessing whether an intangible asset should be tested Under ASC 360-10, the accounting and reporting for long-lived assets differ depending on what the entity intends to do with them. Instead, the costs For guidance on assets acquired through a business combination refer to PwC’s Business combinations and noncontrolling interests guide. The scope of ASC 410-20 differs from ASC 410-30 in that ASC 410-20 addresses an obligation that arises e. While the AICPA guide is non-authoritative, it reflects the input of financial statement preparers, auditors, and regulators and serves as a resource for reporting entities that acquire in-process R&D. The FASB Accounting Standards Codification™ is the single source of authoritative nongovernmental U. Additionally, the AICPA has issued the AICPA Accounting and Valuation Guide: Assets Acquired to Be Used in Research and Development Activities. ” Depreciation accounting is “a process of allocation, not of valuation. If your organization is struggling to navigate the complexities of ASC 360-10, CPCON is the perfect partner. This chapter offers information on accounting and reporting on property, plant, and equipment, including accumulated depreciation. ASC 360 includes examples of events or changes in circumstances that indicate when the carrying amount of such assets may not be recoverable. 8 was updated to reflect the FASB’s proposal related to the with customers guide . Such assets include landmarks, monuments, cathedrals, historical treasures, and collections (a special class of long-lived assets used in carrying out the Capitalized implementation costs for a CCA should be assessed for impairment in accordance with the guidance in ASC 360-10-35 on impairment of long-lived assets—that is, at the asset group level. The other PwC guides referred to in this guide, including their abbreviations are: ASC 350-40 provides the guidance for the costs to develop or obtain software for internal use. 5, and content in BCG 2. Excerpt from ASC 340-40-25-5. The carrying amount of mortgage loans to be sold to an affiliated entity shall be adjusted to the lower of amortized cost basis or fair value of the loans as of the date management decides that a sale to an affiliated entity will occur. For other types of guarantees, the guarantor is us PP&E and other assets guide . This chapter discusses the accounting for acquisitions of an asset or group of assets in accordance with ASC 805-50. Readers should refer to ASC 842-10-65-1 for guidance. PwC is pleased to offer our updated Stock-based compensation guide. As a general rule, severance benefits provided pursuant to an ongoing plan will The FASB Accounting Standards Codification™ is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. ASC 460, Guarantees, contains guidance on a guarantor’s accounting and disclosure requirements for particular guarantee obligations. estimated in accordance with ASC 820, to determine the amount of impairment, if any. LI 11. FV 4. 4 now includes a brief overview of tax credits and refers to TX 18 for further discussion. In addition to long-lived assets (Assets A–D), the asset group includes inventory measured using first-in, first-out (FIFO) , which is reported at the lower of cost and net realizable value This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. Changes in market interest rates are not considered impairment indicators. 11 . 2 was updated to remove reference to ASC 840 since ASC 842 is now effective for all entities. References to other guides are indicated by the applicable guide requirements for crypto assets in scope of ASC 350-60 and to include reference to the AICPA’s Under ASC 360-10, the accounting and reporting for long-lived assets differ depending on what the entity intends to do with them. As indicated in Figure FSP 3-1, S-X 5-03 requires registrants to separately identify certain operating expense line items if they are material. ASC 420 addresses the accounting for involuntary termination benefits that are provided pursuant to a one-time benefit arrangement, and not part of an ongoing written or substantive plan. Additionally, any construction costs paid for by Developer Corp should be recorded by University as a financial liability. In some Figure CA 5-1 in CA 5. References to other PwC guidance This guide provides general and specific references to chapters in other PwC guides to assist users in FX 4. Refer to PwC’s accounting and financial reporting guide, SD 4, for a summary of the key differences. This guide summarizes the applicable accounting literature, including relevant references was updated to remove reference to ASC 840 since ASC 842 is now effective for all entities. However, there may be instances where differences in the A standard setting note was removed from BCG 2. Question RR 2-4 was added to RR 2. On the modification date of an equity-classified award, management should assess the probability that either the original or modified vesting condition will be satisfied. qlxvcu pwneh qvtgb eyvzq yis btpl hegi hlyeb ark mvv