Elizabeth Rodriguez


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FASB issued a Proposed Accounting Standards Update for the 2017-230-
Codification Improvements. In this proposed update there are a variety of
topics in the Codification that will be affected. The Amendments to the FASB
Accounting Standards Codification section provides a chart showing the Topics,
paragraphs, and the essence of the amendment that is being projected. These
improvements affect to all companies that are within the range of the concerned
accounting guidance.

fundamental proposed amendments to the Codification that are related to
asset-type transactions only are the following. Investments-Debt and Equity
Securities (Topic 320) would make easy the Codification by eliminating
repetitious disclosure conditions in paragraphs 320-10-50-1A and 320-10-50-13
(FASB Accounting Standards Codification (2017)). These projected amendments
would replace paragraph 320-10-50-13 and bring explanation to the requirements
in paragraph 320-10-50-1A related to the financial statements. FASB statement
No. 5 contains the disclosure requirements in Section 320-10-50 that did not
explain whether the disclosures where necessary for temporary periods. This is
the reason why stakeholders required clarification. This problem was solved by
the staff when they clarified that the disclosures where essential for
temporary statements.  Statement 115 was
amended by giving explanation whether the disclosure requirements corresponded
with the interim statements. Then paragraph 320-10-50-1A was classified from
paragraph 18A of Statement 115 and paragraph 320-10-50-13 was systemized from
the Special Report on Statement 115. Paragraph 320-10-50-1A must be amended and
paragraph 320-10-50-13 has to be discarded, with al ink transition paragraph
105-10-65-5 (FASB Accounting Standards Codification (2017)) This link contains
the disclosures for 320-10-50-1A and 320-10-50-13. In the 320-10-50-1A, the
disclosures are required for all complete set of financial statements during
temporary and annual periods. The 320-10-50-13 paragraph is displaced by
accounting Standards Update No. 201X-XX.

             The other fundamental proposed
amendment to the Codification is Other Expenses (Topic 720). This amendment has
as objective to coordinate the area of this guidance in the Codification with
the source guidance in SOP 93-7 by eliminating the references in the conduction
and heading to advertising that is categorized as direct-response. The proposed
amendment would also assign the guidance in paragraph 720-35-15-5 related to
direct-response advertising costs to paragraph 944-30-25-1AAA (FASB Accounting
Standards Codification (2017)). The paragraph 720-35-15-5 should be discard
with a link transition to paragraph 105-10-65-4. This includes other expenses-
Advertising Costs, 720-35-15-5 paragraph replaced by Accounting Standards
Update No. 201X-XX. Then paragraph 720-35-25-1 should be amended with a link to
transition paragraph 105-10-65-4. It states that cost of advertising must be
expensed when they incurred or the first time they occur except for the cost
specified in paragraph 720-35-25-1A. These activities should be applied for the
two types of advertising-activities. For instance, when advertising costs are
deferred before advertising happens, it means that costs have been incurred for
adverting that will happen. The other example is when an advertising is showed
for the first time as a tv commercial or the first promotional event of a
magazine. The heading preceding paragraph 720-35-25-1A must be replaced with a
link to transition paragraph 105-10-65-4. Here the expenses for some
advertising are made after revenues are recognized (FASB Accounting Standards
Codification (2017)).

          Another change that is made on this
proposed is an amendment of paragraph 944-720-55-1 with a link transition
paragraph 105-10-65-4. Here the title is Financial Services-Insurance-Other
Expenses that implement the requirement that an insurance entity charge to
expense as incurred any acquirement cost that cannot be benefit according with
paragraphs 944-30-25-1A through 25-1AAA. Some of the costs are soliciting
potential customers, market research, training, administration, and others.

           Another fundamental proposed
amendment to the Codification is Income Taxes-Other Considerations or Special
Areas. Paragraph 740-30-25-9 should be amended with a link transition paragraph
to recognized deferred tax asset (FASB Accounting Standards Codification
(2017)).  For instance, a deferred tax
asset should be recognized for an excess of the tax basis over the amount for
financial reporting of an investment in a subsidiary or of an investment in a
corporate joint venture. In this amendment the goal is to clarify that the
phrase permanent in duration is to change corporate joint venture and is not to
determine to modify the statement investment in a subsidiary.


Accounting Standards Codification (2017). Proposed
Accounting Standards Update 2017-230—Codification Improvements. Retrieved from https://asc.fasb.org/home&agreed=1