Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back once again with Miriam Rouziek, one of our Audit Managers and one of the faces of PKF Texas’s SEC team. Miriam, welcome back to The Playbook.

Miriam: Thanks for having me, Jen.

Jen: In previous episodes we’ve talked a little bit about the PCAOB, which stands for Public Company Accounting Oversight Board, which I know was founded after the whole Enron thing. What changes do they have coming for 2019 – 2020?


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Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Miriam Rouziek, an Audit Manager and one of the faces of PKF Texas’s SEC team. Miriam, welcome back to the Playbook.

Miriam: Thank you for having me, Jen.

Jen: So, tell us what’s coming down the pipe with the SEC? Are they doing any updates this year in 2019?

Miriam: Yeah. The SEC is really going to start focusing on some different things here in 2019.


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The Financial Accounting Standards Board (“FASB”) recently issued Accounting Standards Update (“ASU”) No. 2018-11 with targeted improvements to ASC Topic 842, Leases, to (1) add an optional transition method that would permit entities to apply the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption, and (2) provide a practical expedient for lessors regarding the separation of the lease and non-lease components of a contract.

Prior to the amendments in ASU No. 2018-11, the upcoming requirements in ASC 842 had to be initially applied using a modified retrospective transition method under which lessees were required to recognize lease assets and lease liabilities on the balance sheet for all leases and provide the new and enhanced disclosures for each comparative period presented. In response to constituents’ concerns about unanticipated costs and complexities, ASU No. 2018-11 now allows entities, upon initial adoption, to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Under the new optional transition method, reporting for comparative periods presented must continue to follow the guidance under existing U.S. GAAP.


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The U.S. Securities and Exchange Commission (“SEC”) voted last week to adopt amendments to the “smaller reporting companies” (“SRCs”) definition to expand the number of companies that qualify for the scaled-down disclosure requirements. The Commission established the smaller reporting company category of companies in 2008 in an effort to provide general regulatory relief for smaller companies. SRCs may provide scaled disclosures under Regulation S-K and Regulation S-X.

The new smaller reporting company definition adopted last week enables a company with less than $250 million of public float to provide scaled disclosures, as compared to the $75 million threshold under the prior definition. The final rules also expand the definition to include companies with less than $100 million in annual revenues if they also have either no public float or a public float that is less than $700 million, which reflects a change from the revenue test in the prior definition that allowed companies to provide scaled disclosure only if they had no public float and less than $50 million in annual revenues.
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Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, this week’s host, and I’m here today with Ryan Istre, an Audit Director and a member of the PKF Texas SEC team. Welcome to the Playbook Ryan.

Ryan: Thanks Jen, glad to be here.

Jen: So Ryan what are the hot topics that the SEC staff are looking into these days?

Ryan: That’s a good question Jen. So there are a lot of new accounting pronouncements that are coming up in the very near future but one of the hot topics that the SEC staff are looking into right now are non GAAP financial measures. Some of the items that have come out in recent comment letters relate to the prominence of which non GAAP measures are being displayed over GAAP measures, which we all know is a no-no per Regulation G.

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Jen:  This is the PKF Texas Entrepreneur’s Playbook.  I’m Jen Lemanski, this week’s guest host, and I’m here today with Ryan Istre, an audit director and a member of the PKF Texas SEC team.  Ryan, welcome back to the Playbook.

Ryan:  Thanks for having me here Jen.

Jen:  So I know there’s new revenue recognition rules coming, what are the SEC’s views on this for registrants?

Ryan:  That’s a very good question Jen.  The new revenue recognition rules – or ASC 606 – are going to be effective for most registrants beginning January 1st of 2018.

Jen:  So this year?

Ryan:  This year, that’s correct.  What this is intended to do is bring into congruence the SEC’s rules with the new revenue recognition standards.  Some of the topics that are being discussed are the potentially outdated Regulation SX rules.  Other topics which may be of a little more importance are the effect of what happens with retrospective application of these new pronouncements when there are predecessor financial statements followed alongside successive financial statements.

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Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, this week’s host, and I’m here with Chip Schweiger, and audit director and a member of the PKF Texas SEC team. Chip welcome back to the Playbook.

Chip: Thanks Jen, good to be here.

Jen: So President Trump signed into law the Tax Act on December 21, 21017, it’s got a lot in it; what do SEC companies need to know that’s going to affect them?

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