At the AICPA conference we have previously blogged about, the Chief Accountant explained that the SEC's Office of the Chief Accountant ("OCA") is led by the Chief Accountant, who serves as the principal advisor to the SEC on accounting and auditing matters arising in the administration of the federal securities laws. The OCA has a number of areas of focus, including engagement with stakeholders; oversight of the FASB, new accounting standards and FASB standard setting; oversight of the PCAOB; addressing international accounting, audit and disclosure matters; and providing staff guidance.
The Chief Accountant commented on the OCA's work in connection with the implementation of recent new accounting standards, including the new revenue standard and the new lease standard. He noted that the objective of the new revenue standard is to establish principles to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The OCA also was engaged in providing guidance on the implementation of the new lease standard, which requires lessees to recognize most of the rights and obligations created by leases on the balance sheet. The new credit losses standard (CECL) becomes effective for many public companies beginning in 2020. With respect to implementation of CECL, the OCA has been updating and releasing staff guidance, including, most recently in November 2019, a staff accounting bulletin, SAB 119.
He commented as well on ongoing FASB standard-setting initiatives, including a project regarding the subsequent accounting for goodwill and the accounting for certain identifiable intangible assets; a project on distinguishing liabilities from equity; and reference rate reform. The OCA staff joined the staffs of the Division of Corporation Finance, the Division of Investment Management and the Division of Trading & Markets in a joint statement encouraging market participants to prepare for and address risks related to the LIBOR transition. Among other things, with respect to existing contracts, the joint statement urges market participants to begin the process of identifying existing contracts that extend past 2021 to determine their exposure to LIBOR. The OCA is monitoring developments in the area, including the FASB's proposed ASU on temporary optional guidance to ease the potential burden in accounting for contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.
The Chief Accountant also discussed the role of the OCA in various international standard setting and monitoring organizations, as well as its involvement with IOSCO.
The full text of the remarks is available here.
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