What’s new with GAAP?
What’s new with GAAP?
In March 2018, the Financial Accounting Standards Board (FASB) stated that the United States Securities and Exchange Commission (SEC) confirmed its approval of the 2018 U.S. GAAP taxonomy. The FASB is an independent not-for-profit organization that sets accounting and reporting standards under U.S. GAAP.
The updated taxonomy was initially released by the FASB back in late 2017, in order to help filers with the SEC become acquainted with the new updates in advance of filing in 2018. However, it remained subject to final approval until the SEC’s announcement in March 2018.
We outline the key changes in the 2018 taxonomy below.
Updates to U.S. GAAP Financial Reporting Taxonomy
Every year, the FASB issues an update to the U.S. GAAP taxonomy, in order to keep it in line with the latest reporting requirements.
The 2018 updates are in response to items such as changes to accounting standards, as well as more general updates intended to improve the taxonomy as a whole.
Additionally, it is worth noting that the U.S. GAAP 2016 taxonomy is still expected to remain available until around June 2018, although it is recommended that filers use the latest taxonomy available. As such, most filers will find that they will need to transition over to the 2018 taxonomy at some point in the near future.
The FASB has released a number of guides, including release notes, technical notes, and a summary of the changes between the 2017 and 2018 taxonomy. These guides are intended to provide further information and clarification in relation to the updates for those that need it.
Shared Reporting Taxonomy Approved
Along with the acceptance of the 2018 U.S. GAAP taxonomy, the SEC also confirmed in March that it had accepted the Shared Reporting Taxonomy (SRT).
The SRT is a new taxonomy, which will help entities that prepare their financials in line with International Financial Reporting Standards (IFRS) and submit those financials to the SEC.
Essentially, the SRT contains tags that will supplement the existing IFRS taxonomy, although the FASB states that the SRT also contains tags that will meet SEC requirements in relation to:
· Financial schedules;
· Condensed consolidating financial information for guarantors; as well as
· Disclosures on oil- and gas producing activities.
What’s more, the vast majority of tags within the SRT have been taken from the 2018 U.S. GAAP taxonomy. However, this should not have any adverse implications for entities that file under U.S. GAAP and need to use tags within the SRT, as they should still be able to search for them.
As with filers that will use the 2018 U.S. GAAP taxonomy, filers considering whether to use SRT should take the time to familiarise themselves with the new tags, to determine whether the taxonomy is suitable for them.
DataTracks has extensive experience and expertise with a range of taxonomies, including U.S. GAAP and IFRS. What’s more, DataTracks keeps up to date with the latest announcements from the SEC, and ensures that all taxonomy updates are implemented well in advance of any mandates into our software and services.