NAAATS Conference 2016: A Bird’s Eye View
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NAAATS Conference 2016: A Bird’s Eye View
By Kristin A. Ryan, CPA
Salt Lake City provided a beautiful backdrop for this year’s NAAATS (National Advanced Accounting & Auditing Technical Symposium) Conference. The conference was held at the Grand America Hotel, which is beautiful; however, as a Houston native accustom to big city life, I chose to venture out and stay in the nearby Wasatch Mountains in Park City, Utah.
The trip provided the perfect balance between physical and mental stimulus! I had never been to this area, and it’s a fantastic site to zipline and mountain bike in the summer. Driving through the mountains, to and from the conference, wasn’t too shabby, either. Next year’s conference is under a new and interesting concept called “ENGAGE,” which will bring together five of the AICPA’s well-known conferences, along with the Association for Accounting Marketing Summit, for four days. Although not terribly far from this year’s venue, the conference will have a little different backdrop in 2017 at the MGM Grand in Las Vegas.
Wow, the conference jam-packed with tons of timely and relevant information! It was my first time, and I can see now why it is so well attended. Especially in these times, we seem to be constantly overscheduled and under-resourced; however, this conference is one not to be missed.
From my perspective as a seasoned auditor serving the middle-market, the AICPA did a fantastic job of focusing on topics relevant to our client space. With topics such as Audit & Accounting Hot Topics, Revenue Recognition, Employee Share-Based Payments, and Warrant Accounting, the conference covered just about everything today’s accountants and auditors need to know. The set up was very well organized and made the best use of attendees’ time. One of my favorite features was the mobile app, which not only provided easy access to the schedule, but also instructor/speaker bios, interactive polls and a forum for questions that was all updated in real-time.
The A&A update started with an overview of some of the private company alternatives that were released in 2014, in an effort to ensure that these are being used appropriately to assist smaller companies with some of the potentially burdensome requirements designed for larger, public companies. These included Accounting for Goodwill (ASU 2014-02), Simplified Hedge Accounting Approach for Plain-Vanilla Swaps (ASU 2014-03), Applying VIE Guidance to Common Control Leasing Arrangements (ASU 2014-07) and Accounting for Identifiable Intangible Assets in a Business Combination (ASU 2014-18). As a supplement to these 2014 updates, ASU 2016-03 was recently issued to make these alternatives effective immediately by removing their effective dates and requirement for a preferability assessment.
We can’t hide from the impending revenue recognition changes, looming in the distance (ASU 2014-09 is effective in 2018 for public filers, and 2019 for private companies). Top impact areas were covered fairly extensively, and included minimum requirements to recognize revenue, recognizing revenue over the life of a contract, loyalty programs/promotions, customer acceptance, satisfaction guarantees, variable consideration, multiple units of account for a single contract and licenses of intellectual property.
The takeaway is that there’s an increased need for judgment, as well as a ton of new concepts and terminology coming our way. The impact will be significant for certain industries, namely broker-dealers, construction contractors, health care, hospitality, not-for-profits, energy, power & utilities, software, and telecommunications. We’re encouraged to use past lessons, such as Sarbanes-Oxley, and know that this will be a heavy focus of inspections and peer reviews. Conversations now will go a long way in assisting our clients by identifying the areas they need to hone in on, as well as potentially modifying contract language.
Another biggie coming down the pipeline that will have a significant impact on companies of all sizes are the changes related to lease accounting (ASU 2016-02 is effective in 2019 for public filers, and 2020 for private companies). Those highly impacted are companies with numerous operating leases that include these industries: drugstores, retail & restaurant chains, telecommunications, airlines, banks, and grocery stores. All leases are going on the balance sheet, so we’re encouraged to begin discussions with our clients around how these will not only affect their accounting, but also their debt covenant requirements and compliance.
SSARS 21 is now fully effective and continues to be a hot discussion topic. We need to be aware of the new distinction between bookkeeping, preparation and compilation services, and related requirements for each, as it relates to independence of the accountant performing the services, engagement letters and reporting.
A few others that rightfully remain under the microscope are standards updates related to business combinations (ASU 2014-17 & 2015-16), financial instruments (ASU 2016-01 & 13), and derivatives & hedging (ASU 2015-13, 2016-05 & 06). Effective dates range from immediately to 2019.
Several other notable sessions offered at the conference included professional/standard setter updates, peer reviews, consolidation of variable interest entities, legal liability, fair value issues, risk assessment, new going concern standard, data analytics, fraud and cybersecurity. These continue to be relevant topics that are ever-changing, many of which involve highly technical knowledge and expertise. It is key that we are able to help equip our clients with the best information available.
Kristin A. Ryan, CPA, is an audit manager with PKF Texas. Contact her at (713) 860-5479 or email@example.com.