This week’s GAAP Flash includes articles about the rise and importance of corporate eLearning, preparing for and transitioning to the new revenue recognition standard (ASC 606), increase in FX hedging activity, and other accounting news provided to help increase business acumen of CPAs.

Why C-Levels Need to Think About eLearning and Artificial Intelligence (February 6, 2017) – Forbes (@forbes)

Corporate learning and training is important. How important? Consider these facts:

• 68% of workers say training and development is the most important workplace policy.
• 84% of global executives ranked employee learning as important or very important.
• Every dollar invested in online training results in a $30 increase in productivity.

This article goes on to discuss how companies are using new technology, such as artificial learning (AI), to improve learning. It states AI can help predict learning and performance, create deep personalization based on individual preferences, and identify places where courses need to be optimized or improved.

How It’s Relevant: I absolutely LOVE the statistics in the article demonstrating the benefits of training to organizations (obviously, since I’m an owner of a training company). I especially like this one about eLearning:

• Companies that use eLearning technology achieve an 18% boost in employee engagement.

No doubt eLearning is one the rise and, at GAAP Dynamics, we’ve been helping some of the world’s largest accounting firms and companies implement accounting eLearning within their organizations. Why the uptick? Well, cost savings is a big factor, but, as the article points out, the biggest benefit is that eLearning provides consistent quality of delivery and the ability to gather large amounts of data about learners simultaneously.

Wondering which eLearning design is right for your organization? Check out this post. Undecided about whether to use Adobe Captivate or Articulate Storyline? We weigh the pros and cons of both in this post. And of course, don’t hesitate to contact our Director of eLearning, Vicky Hale, if you have any questions!

Preparing for the New Revenue Recognition Standards: Choosing the Right Adoption Method (February 8, 2017) – Accounting Today (@AccountingToday)

One of the most important considerations when implementing the new revenue recognition standards (ASC 606 or IFRS 15) is deciding on one of two adoption methods to transition to the new standard. According to a recent survey by PwC, over half (52%) of survey respondents have yet to decide on an adoption method. The article briefly describes the two methods, including the advantages and disadvantages of each.

How It’s Relevant: Another statistic in the survey is far more startling – only 17% of public companies are in the process of implementing then new standard. Furthermore, 75% of public companies are still assessing the impact of ASC 606 on their organizations. Friendly reminder: the standard is effective for public companies in 2018! To help you out, we published this post documenting other issues public companies should consider when transitioning to ASC 606.

Want to increase the knowledge of this new standard within your organization, outside the core transition team? Have your people check out our free eLearning course!

As Foreign Currencies Swing, CFOs Hedge (February 14, 2017) – WSJ CFO Journal (@CFOJournal)

We’ve been documenting the volatility in the currency markets, especially the British pound, over the past several months. That’s why we made available (for free!), a slide deck outlining the requirements for accounting for foreign currency transactions and translation under U.S. GAAP. Well, it should come as no surprise that these gyrations are causing European CFOs to increase their hedging efforts. According to the article, experts predict more hedging on the horizon as political uncertainties increase.

How It’s Relevant: Hedging is a necessary evil. The article quotes Wolfgang Koester, CEO of FIREapps, who said “extreme currency movements could easily wipe out a small to medium sized company’s profits if the balance sheet is not hedged.” But hedging comes with a cost, namely the documentation. Part of this documentation relates to assessing the effectiveness of the hedge. And good luck trying to stay effective when POTUS has his finger on the Twitter button!

PCAOB Launches AuditorSearch, Disclosing Engagement Partner Names (February 22, 2017) – MACPA (@MACPA)

The PCAOB’s requirement that audit firms disclose the names of engagement partners on Form AP is effective for audit reports issued on or after January 31, 2017. This article notes that the PCAOB has launched a searchable database called AuditorSearch, which allows the public to view the names of engagement partners.

How It’s Relevant: In related news, the PCAOB recently issued updated staff guidance for firms applying the new requirements of Form AP. This new guidance updates a previous guidance on Form AP that the PCAOB issued on January 26, 2017.

I do not believe that making engagement partner names available to the public will have any impact on audit quality. They are already known by the PCAOB and face severe consequences in the case of an audit failure. What do you think? 

Disclaimer
This post is published to spread the love of GAAP and provided for informational purposes only. Although we are CPAs and have made every effort to ensure the factual accuracy of the post as of the date it was published, we are not responsible for your ultimate compliance with accounting or auditing standards and you agree not to hold us responsible for such. In addition, we take no responsibility for updating old posts, but may do so from time to time.