SEC Virtual Conference: An Accounting & Reporting Update for Public Companies

DAY ONE AGENDA

Welcome & Opening Remarks
8:45 – 9:00 AM

Key SEC Developments
9:00 – 10:30 AM
• SEC Commission & Staff Changes
  – Staff/administration leadership focus
• SEC Reporting in the COVID-19 Environment
  – Deferral of Exchange Act reports
  – Corp Fin Disclosure Topic No. 9
  – Non-GAAP Measures
• SEC Financial Disclosure Rulemaking
  – Change to non-accelerated filer definition
  – New definitions of accelerated and large accelerated filers
  – Amendments to Rule 3-10 and Rule 3-16
     – Guaranteed debt or debt-like securities
  – Rule 3-13 Waiver requests
     – S-X Rule 3-13 relief
     – SEC staff waiver requests
  – Amendments to Rule 3-05 and Article 11
     – Changes to reporting acquisitions and dispositions
     – Reduced Requirements for Registration Statements
     – Pro Forma Information
     – Disclosure Effectiveness
• Proposal to Modernize & Simplify Certain Parts of Regulation S-K
• Inline XBRL

Break
10:30 – 10:40 AM

Key SEC Developments (continued) 
10:40 AM – 12:25 PM
• SEC Interpretive Guidance
  – Key performance indicators and metrics in MD&A
• Critical Audit Matters (CAMs)
  – Applicability of CAM Reporting
  – Communication
  – Early observations and examples
• Cybersecurity
  – Disclosures
  – Best practices
  – SEC enforcement priority
• Legislative Update
  – JOBS Act 3.0
  – Financial services reform
• SEC Reporting Implications of FASB Transition Approach—Credit impairment (ASC 326)
  – Key disclosure changes
  – COVID-19 implications
• SEC Staff Comments and Trends
  – SEC staff focus areas
  – ASC 606, Revenue from Contracts with Customers
  – Non-GAAP measures
  – MD&A
  – Goodwill issues
• CARES Act Accounting Issues
  – Paycheck Protection Program (PPP)
  – Loan Modifications related to COVID-19

Lunch
12:25 – 1:10 PM

ESG & Financial Reporting
1:10 – 2:40 PM
The focus on environmental, social and governance issues continues to accelerate as investors and other stakeholders are increasingly looking to understand and assess material ESG factors in their investment, purchasing and employment decisions. This panel will discuss the key drivers demanding corporate attention on ESG, and how financial reporting teams can help companies to identify, assess and disclose ESG issues in ways that increase trust with stakeholders and enhance corporate reputation and long-term value.

Break
2:40 – 2:45 PM

FASB Update
2:45 – 4:00 PM
• FASB Current Active Agenda
• Recently Completed Projects & Related Implementation Issues
• Recently Issued Exposure Drafts & Other Formal Projects 
• Accounting Updates with Upcoming Effective Dates
• Disclosure Effectiveness
• Simplification Projects
• EITF Update

Break
4:00 – 4:05 PM

Financial Instruments: Credit Losses (ASC Topic 326) & Current Expected Credit Loss (CECL) Model
4:05 – 5:20 PM
The FASB’s New Standard on Credit Losses changes the accounting rules for impairment of financial instruments by adding a CECL model based on expected losses rather than incurred losses. This session will focus on:
• CECL Core Concepts
  – Amortized cost
  – Contractual life of an asset
  – Available relevant information
  – Risk of loss
  – Key changes from Incurred to Expected loss
• Impact to Trade Receivables
  – Methodology considerations—accounts receivable
  – Level of aggregation
  – Developing the loss estimate
  – Method using an aging schedule
• Recent Developments
  – Freestanding insurance contracts
  – CARES Act
  – COVID-19
  – Summary of CECL disclosures—Q1 2020
  – Estimated impact of ASC 326 adoption (non-banks)
• CECL Implementation Considerations
  – Effective date and transition
  – New disclosure requirements
  – Changes to process and controls
• AFS Debt Security Impairment Model
  – What’s changing
     – Current guidance vs. New Standard
  – Determining whether a Credit Loss exists
  – Confirming credit loss and measuring allowance
  – Transition considerations
 

DAY TWO AGENDA

SEC Enforcement Issues
8:45 – 10:15 AM
• SEC Enforcement: The Current Landscape
• Current SEC Commissioners
• New SEC Enforcement Policy Focus: Technology & Individuals
• SEC Enforcement Actions, Penalties & Trends
• The Share Class Initiative Influenced Trends in FY 2019
• SEC Whistleblower Program Update & Awards
• Arsenal of SEC Enforcement Weapons
• Examples of Specific Risks for the Initiation of SEC Investigations
• Accounting Areas of Focus
• Recent Accounting & Reporting Case Examples
• Recent Cases Against Individual Auditors & Accountants
• Litigated Financial Fraud & Auditor Cases
• Recent FCPA Cases
• SEC Focus on Cyber: Disclosure, Internal Controls, Cryptocurrency, etc.
• Insider Trading
• Questions

Break
10:15 – 10:20 AM

Public Company Auditing Update
10:20 – 11:35 AM
• The PCAOB’s 2019-2023 Strategic Plan
• Inspections Outlook for 2020
• Reporting & CAMs
  – Auditor reporting overview
  – Auditor reporting model—Phase 2: CAMs
  – Communication of critical audit matters
  – How will auditors determine CAMs
  – What will auditors communicate about CAMs
  – Language to be used in communicating CAMs
  – Will auditors disclose on “original information?”
  – Early learnings and trends
• Internal Controls Over Financial Reporting
  – Relationship of disclosure controls and procedures and ICFR
  – Management review control challenges
  – Evaluation of a deficiency
  – SEC Report of Investigation regarding certain cyber-related frauds perpetrated against public
     companies and related accounting controls requirements
  – Consideration of cybersecurity incidents
• Standard Setting
  – Standard setting updates: PCAOB’s current activities
  – Strengthened requirements related to auditing accounting estimates and fair value measurements
  – New standards addressing the use of specialists
  – Use of other auditors
  – Quality control standards, including assignment and documentation of firm supervisory
     responsibilities
  – Research agenda

Break
11:35 – 11:40 AM

Deep Dive Into SEC Comment Letter Trends
11:40 AM – 12:40 PM
The SEC Division of Corporate Finance’s filing review process is a key function utilized by the SEC staff to monitor the critical accounting and disclosure decisions applied by registrants. Comments are based primarily on a company’s disclosure and other public information, such as websites, press releases, and analyst calls. Nonpublic information, such as whistleblower tips and PCAOB inspection reports, can also be a source of comments. Recent significant changes in ASC topics are responsible for many comments, however that does not tell the whole story. There are often recurring themes.
In this session, SEC experts will explore these recurring themes that should be observed and understood when crafting financial statement disclosures, MD&A disclosures, and investor presentations. In addition, they will also explain the comment letter process and best practices for responding to SEC comment letters and effectively closing a filing review.

Lunch
12:40 – 1:25 PM

Recent Developments in Business Combinations, including Goodwill and Impairments
1:25 – 2:25 PM
• Overview of Business Combination Accounting
  – Basic definition and key accounting concerns
  – Control obtained through non-traditional events
  – Business combinations vs. asset acquisitions
  – ASU 2017-01—definition of a business
  – Goodwill arising from a business combination
• The “Acquisition Method” (ASC 805): Five Steps
  – Identify the acquirer
  – Determine the acquisition date
  – Measure the consideration transferred
  – Recognize and measure the identifiable assets acquired and liabilities assumed
  – Recognize and measure goodwill or gain from bargain purchase
• Acquisition-Method Accounting—“Pushdown Accounting”
  – Allocation of purchase consideration—assets and liabilities
  – Calculation of goodwill
  – Reconciliation of acquirer investment to opening equity
• Examples & Case Studies
  – Reverse mergers
  – Consolidation, deconsolidation and other changes in Investee/Acquiree Equity
  – Contingent consideration—equity vs. liability classification
  – Equity classification for earn-outs
  – Measurement-period adjustments

Break
2:25 – 2:30 PM

Financial Accounting & Reporting Impact of Change to LIBOR & Other Reference Rates
2:30 – 3:45 PM
The upcoming phase-out of the London Inter-bank Offered Rate (LIBOR) in favor of alternative reference rates will lead to extensive changes to global finance. LIBOR is used extensively in the US and global markets as a reference interest rate in a broad range of financial instruments and commercial agreements, but the banks that report information used to set this rate will no longer be required to do so after 2021. Regulators in various jurisdictions have been working to replace LIBOR and other interbank-offered rates with reference interest rates that are more firmly based on actual transactions from liquid markets. The transition to new reference interest rates will require countless contracts, such as derivative contracts and variable rate debt agreements, to be modified. Accounting changes to contracts stemming from reference-rate reform could be costly and burdensome to apply and could have significant effects on financial reporting, including increased earnings volatility.
This session will focus on the accounting impact from the LIBOR transition including:
• Hedge accounting and inventorying all hedge accounting elections
• Debt agreements and modifications
• Discount rate development applied in key models such as lease accounting and fair valuation
• Establishing a process to inventory applicable instruments, implementing controls to ensure any
  practical expedients elected are eligible

Break
3:45 – 3:50 PM

Internal Controls—Hot Topics
3:50 – 5:20 PM
This session will provide an update on current trends associated with a company’s internal control environment and expectations for public companies to maintain documentation of the execution of processes and controls based on recent guidance and enforcement action from the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB).
Topics that will be discussed include:
• Documentation expectations associated with management review controls
• How to document the controls associated with information produced by the entity
• Entity-wide controls
• Controls over estimates and significant and unusual transactions
• Monitoring activities and evaluating deficiencies

Conference Ends
5:20 PM