Accounting Standards Updates
Extraordinary Items
All references to Extraordinary Items will no longer be segregated on the Income Statement. An event was considered extraordinary if it was both unusual and infrequent. This change allows for early adoption, and retrospective application.
Business Combinations – Intangibles
Non-public companies are no longer required to recognize intangible assets that cannot be resold after an acquisition, such as customer lists and covenants not to compete. This change allows for early adoption.
Debt Issuance Costs
Debt issuance costs are no longer recognized as assets, and will instead be recorded as a reduction of the related debt, much like a discount or premium. The costs related to the debt issuance will be amortized through interest expense. This change allows for early adoption, and requires retrospective application and a footnote disclosing a change in accounting principle.
Updates in the Works
Inventory Valuation
It has been proposed that the valuation of inventory be changed from lower of cost or market to lower of cost and net realizable value. Under this provision, inventory would be stated at cost, unless it is being sold for less.
Deferred Taxes Assets and Liabilities
In the future, Deferred Tax Assets/Liabilities may only be considered non-current.
