This edition of GAAP Flash has some articles that may catch you off guard! It turns out that the majority of CFOs are not confident in the value of financial reporting and their confidence level has declined significantly from 2014. Another surprise is that 20% of listed companies are not in compliance with IFRS standards. Are you? In other news, Valeant’s bad luck may be turning around. We will see if the good luck sticks around! Also, the FASB issued new guidance that is actually intended to help simplify accounting for share-based payments. Keep reading to find out more!

CFOs Losing Confidence in Value of Reporting (February 18, 2016) – CFO.com (@CFO)

On a scale of one to ten, how confident are you as a CFO, or how confident do you think your CFO is, that corporate reports comply with all reporting needs and requirements? Would you be surprised if I told you that according to a report issued by EY, only 55% of CFOs who were surveyed were fully or somewhat confident that reports issued in 2015 complied with all reporting needs and requirements? I sure was! In 2014, the same survey revealed that CFOs were 84% confident in the reporting. That is a decrease of almost 35%!

The article states that the loss of confidence in reporting is primarily due to “increased complexity of reporting; growing demand, with finance leaders concerned there is a widening gap opening up between the reports that regulators demand and the reports that other stakeholders such as investors require; and pressure on resources”.

The decline in confidence in reporting isn’t the only issue exposed in the survey. Check out the article to find out what other issues were exposed!

20% of Listed Companies Fail IFRS Standards (April 6, 2016) – Accounting Weekly (@saibabusiness)

Are you in compliance with IFRS standards? There’s a chance that you may not be. The European Securities and Market Authority (ESMA), recently issued a report titled, Report on Enforcement and Regulatory Activities of Accounting Enforcers in 2015.

The report states that more than 20% of companies who were examined (189 listed securities issuers across 26 countries) had some issues in complying with IFRS standards and enforcement was taken against 40 of the issuers. The problems ranged from deferred tax assets arising from losses to the classification of joint ventures.

The report also stated that the interim or annual financial statements of approximately 1,200 issuers listed on the EU regulated markets were examined and due to issues identified, enforcement was taken against 273 of those issuers. The problems ranged from the presentation of financial statements to accounting for financial instruments.

Want more information? Read the full article to find out more. You can also read the full report here.

The Morning Ledger: Valeant Gains Breathing Room on Debt Obligations (April 7, 2016) – WSJ CFO Journal (@CFOJournal)

It looks like Valeant’s bad luck may be turning around!

Valeant convinced more than half of its loan holders to push back filing deadlines and relax their strict loan covenants. However, the leniency didn’t come without a cost. Valeant has agreed to pay the lenders $50,000 per $10 million of loans and also agreed to increase the interest rate by one percent. Although the new agreement will cost Valeant more, it is better than the other option!

It also turns out that Walgreens Boot Alliance is still excited for its collaboration with Valeant, despite all of the negative news lately. Last year, Valeant announced that they entered into a 20-year agreement with Walgreens. As part of the agreement, Walgreens will sell Valeant’s skin and eye medications, as well as more than 30 other Valeant drugs at a discounted price.

Only time will tell if Valeant’s good luck stays around!

FASB Issues New Guidance on Employee Share-Based Payment Accounting (March 30, 2016) – FASB.org (@FAFNorwalk)

On March 30, 2016, the FASB issued an Accounting Standards Update (ASU) that will simplify and improve the guidance on accounting for share-based payments. The main provisions of the ASU help to simplify income tax consequences, classification of awards as equity or liabilities, as well as the classification on the statement of cash flows.

In addition, the ASU helps to make the guidance simpler for private companies. The guidance allows private companies to apply a practical expedient to estimate the expected term for awards with performance or service conditions that have specific characteristics, as well as make a one-time election to switch from measuring awards at fair value to intrinsic value.

The ASU is effective for fiscal years beginning after December 15, 2016 (i.e. 2017 calendar years). For private companies, the ASU is effective for fiscal years beginning after December 15, 2017 (i.e. 2018 calendar years). Early adoption is permitted.

To see the complete ASU, please click here.