PwC's accounting podcast

The SEC is proposing significant changes to its disclosures required for acquisitions and dispositions of businesses. In this episode, Heather Horn welcomes back Martin Thiselton-Dyer to discuss the details of the proposal and what it could mean to registrants, including:

1:20 - Recap on existing rules. Learn more about the current guidance and the background on the proposals.

4:04 - Why change. We discuss how the proposals could reduce complexity and cost of compliance.

6:47 - Details of the proposal. Martin provides an overview of the proposed changes to disclosures required for acquisitions and dispositions of businesses.

19:41 - Feedback. We discuss some of the preliminary feedback on the proposals.

24:53 - Next steps. What else do you need to know? We wrap it up by sharing some final observations.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Wish you didn’t have to face another annual goodwill impairment test? Does amortizing goodwill or using a trigger-based assessment sound better? The FASB is soliciting feedback on these ideas and more in their recent invitation to comment on identifiable intangible assets and the subsequent accounting for goodwill. Before you put pen to paper, hear what Andreas Ohl tells Heather Horn regarding the details of the proposal, including: 

6:19 - Amortization period. Over what period of time would a company amortize its goodwill? We discuss some options and the challenges involved.

11:44 - Other assets. Should other assets be subsumed into goodwill? We debate this and discuss the related private company alternative.

16:00 - Impairment testing model. How will  impairment testing be impacted? We discuss how it could be simplified.   

18:16 - Disclosures. What would a change mean to disclosures? We tell you what’s being considered.

20:22 - Other considerations. What else do you need to know? We wrap it up by sharing some final thoughts.

About our guest

Andreas Ohl is a partner in PwC's National office, where he focuses on mergers and acquisitions under US GAAP and IFRS. Andreas is chairman of the Business Valuation Standards Board at the International Valuation Standards Council, is  a member of the working group that authored the AICPA's In-Process R&D guide, and has served as a member of the FASB's Valuation Resource Group.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting. 

Accounting for loss contingencies, or, as some still refer to it, “FAS 5” liabilities, impacts many companies. The principles underlying the accounting serve as the foundation to other areas of GAAP. In this episode we’re going back to the basics and providing a refresher on the contingency model. Pat Durbin joins Heather Horn to help navigate the guidance and answer our questions, including:

5:47 - Remote loss contingencies. Pat explains the situations when a loss contingency should neither be accrued nor disclosed. 

9:32 - Reasonably possible loss contingencies. In this segment, we turn our attention to circumstances when no accrual is required, but disclosures still need to be made. Pat walks us through the likelihood continuum.

13:58 - Probable loss contingencies. Pat discusses when a company is required to accrue a liability and disclose the nature of the contingency. 

16:51 - Gain contingencies. After loss contingencies, Pat describes the gain contingency model and highlights differences from the loss contingency model.

20:25 - Recovery of a loss. To close out the episode, Pat answers a frequently asked question on how to account for loss contingencies when a company has insurance.

About our guest

As the leader of the revenue and liabilities team in PwC's national office, Pat Durbin leads a team of partners and directors responsible for consulting with our clients and engagement teams on complex accounting matters relating to revenue, compensation, income taxes, loss contingencies and several other topics under both US GAAP and IFRS. In addition to client-specific matters, he and his team monitor the activities at the FASB, IASB, and other standard-setting and regulatory bodies (e.g., SEC) and develop the firm's accounting guidance on new and existing GAAP.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Think segment reporting is just about disclosure? Think again. In this episode we go back to the basics to discuss the broader impact it can have on your financial statements. Matt Sabatini joins Heather Horn to help navigate the guidance and answer our questions, including:

1:00 - Scope/overview of the model and why companies should care. Matt provides a brief background and takes us through the segment reporting model.

3:00 - Operating segments. The first step to segment reporting is to identify your operating segments. Matt explains how to identify an operating segment and the role of the chief operating decision maker.

12:12 - Aggregation and reportable segments. Not all operating segments need to be reported separately. Matt provides an overview of the aggregation criteria and how to determine your reportable segments.  

19:42 - Disclosures. Matt provides an overview of the required disclosures for reportable segments. Spoiler alert― there’s a lot of them.

24:27 - Other considerations. Matt explains how the identification of segments impacts more than just disclosures and shares other insights.

About our guest

Matt Sabatini is a partner in PwC's National Office, where he helps clients and engagement teams navigate the accounting and financial reporting for complex transactions. He specializes in mergers, acquisitions, corporate reorganizations, recapitalizations, joint ventures and other investments. He is a frequent presenter at conferences and on webcasts on these topics.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

As companies kick off their third quarter, we turn our attention back to the new leases standard to look at a key day 2 accounting issue: remeasurement. In this episode, Jillian Pearce joins Heather Horn to take a closer look at some of the more complex questions; topics include: 

2:27 - The new rules of modifications. We first identify what a modification is and then look at some of the changes to the framework for how companies should evaluate them. 

7:23 - Other types of remeasurements. Events other than formal lease modifications can result in the need to remeasure. Jillian provides examples of the types of events that may trigger a remeasurement and addresses related commonly asked questions.

11:10 - You have a modification or a remeasurement event. Now what? Jillian highlights how to think about the resulting reassessments, reallocations, and recalculations.   

13:44 - Accounting for right of use assets. Jillian helps us think through remeasurement adjustments to the right-of-use assets.

15:20 - Processes and controls. What types of monitoring and ongoing controls should companies have in place? Jillian highlights the holistic processes companies should  think about to make sure that changes that may impact lease accounting are communicated to the right people at the right time. She then wraps up by providing additional resources for understanding the new rules.

About our guest

Jillian Pearce is a Director in PwC's National office, providing advice on technical accounting issues to clients. She has over twelve years of experience performing audits of public and nonpublic entities, specializing in the power and utilities industry.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Earnings per share measures get a lot of attention from users of financial statements; however, calculating EPS can be complex. In this episode, John Bishop, PwC partner, joins Heather Horn to provide a refresher on the models and demystify the calculations. Topics include:

2:22 - Basic EPS - John provides an overview of the basic EPS model and then breaks it down step-by-step (numerator and denominator considerations).

6:58- Diluted EPS. Before John dives deeper into the calculations, he provides a brief overview of what diluted EPS is intended to present and the various models to calculate it.

11:52 - Methods of incorporating potentially dilutive securities in diluted EPS. John dives deeper and provides overviews of the treasury stock method, if-converted method, contingent share model, and two class method.

17:51 - Anti-dilutive sequencing. When calculating diluted EPS, proper sequencing is important. John explains how sequencing impacts the calculations and the adjustments and judgments that need to be considered.

23:18 - Application of control number in interim and annual reporting. Last but not least, John shares some reminders on the application of the control number concept in interim and annual reporting.

About our guest

John Bishop is a partner in PwC’s National office and the co-leader of the financial instruments team. In this role, he leads the group in advising the firm’s clients on a wide array of accounting and reporting matters. John specializes in the accounting for derivatives, financial instruments, financing transactions (e.g., securitizations and leasing) and M&A transactions. He has worked with and advised a variety of the firm’s clients including investment banks, commercial banks, private equity firms and companies in the merchant power, utility, real estate and retail industries.

About our host

Heather Horn Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

To consolidate or not to consolidate - that is the question. If you need to better understand the answer (or just need a quick refresher) then listen to this week’s episode in which Heather Horn and Matt Sabatini go back to the accounting 101 of consolidations. Topics include:

• 0:41 - Scope/overview of models. Before jumping into the different models, Matt provides a brief history lesson and walks us through the scope of the consolidation guidance.
• 3:29 - Variable interest entity model. The variable interest entity (or VIE) model is the starting place for any company thinking through consolidations. Matt walks us through the five characteristics of a VIE.
• 10:44 - Voting interest model. Matt explains how the voting interest entity (or VOE) model differs from the VIE model, and explains when a company should use each model.
• 14:40 - Impact. After explaining the two models, Matt highlights the roles judgment and consistency play when thinking though consolidation, as well as why it’s important for companies to get it right.
• 21:51 - Recent guidance (private company alternative). Matt describes the recent guidance that simplifies the model for private companies, easing the economic burden.

About our guest

Matt Sabatini is a partner in PwC's National Office, where he helps clients and engagement teams navigate the accounting and financial reporting for complex transactions. He specializes in mergers,  acquisitions, corporate reorganizations, recapitalizations, joint ventures and other investments. He is a frequent presenter at conferences and on webcasts on these topics.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

Need a refresher on accounting for foreign currency translations and transactions? In this week’s episode, Heather Horn and PwC managing director John Horan go back to the basics and examine the accounting for foreign currency, including:

• 3:10 - Identification of foreign entities - John discusses how to identify a company’s foreign entities, including the definition of a foreign entity, the concept of separate and distinct operations and why identification is so important to getting the right accounting.
• 8:29 - Determining the correct functional currency - John discusses the indicators that should be considered when determining the functional currency of foreign entities.
• 13:50 - Routine foreign currency accounting - John discusses foreign currency transactions, remeasurement, and the translation process.
• 18:10 - Releasing CTA - John shares his perspectives and answers common questions on when, and if, CTA should be released. 
• 23:00 - Other complex areas seen in practice - John discusses the concept of loans designated as a permanent advance. He also discusses the steps a company should take if it wants to change the designation.

About our guest

As a managing director in PwC’s National office, John Horan assists clients with complex accounting issues in the areas of foreign currency, liabilities and equity, earnings per share and derivatives and hedging. John specializes in large capital transactions and initial public offerings.

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].

What do investors and analysts really want to learn from your financial statements? And what are their areas of focus? We answer those questions (and more) from our investor outreach on this week’s episode. PwC director Gregory Johnson joins Heather Horn to discuss what’s on the minds of investors, including:

• 5:05 - An important part of adoption of new accounting standards is disclosures; so, how do disclosures tie into what investors are looking for? Gregory highlights the opportunity that companies have to tell their own story and better inform the market. 
• 8:04 - What disclosures are investors focused on? Gregory discusses the investor feedback surrounding risks and uncertainties and the ways companies and preparers can ease concerns. 
• 11:26 - All areas of reporting require judgment, but what are the recurring judgments the investment community cares about most? Gregory provides details on segment reporting and non-GAAP measures.
• 16:51 - What are the other focus areas being discussed in the investment community? Gregory helps us understand the differing views on share repurchase programs. 
• 20:11 - What do investors think of the recent SEC proposal on earnings releases and quarterly reporting? Gregory shares insights from the investment community on the frequency of reporting.

About our guest

Gregory Johnson is a director in PwC’s National office with a primary focus on investor engagement. In this role, Gregory builds relationships with investors, analysts, and governance professionals to gain insights into their views on corporate reporting, industry trends, regulatory developments, and other issues that may impact investment decisions. 

About our host

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].