83 FR 1295 - Staff Accounting Bulletin No. 117
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 8 (January 11, 2018)
Federal Register Volume 83, Issue 8 (January 11, 2018)
| Page Range | 1295-1296 | |
| FR Document | 2018-00352 |
[Federal Register Volume 83, Number 8 (Thursday, January 11, 2018)] [Rules and Regulations] [Pages 1295-1296] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-00352] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 211 [Release No. SAB 117] Staff Accounting Bulletin No. 117 AGENCY: Securities and Exchange Commission. ACTION: Publication of Staff Accounting Bulletin. ----------------------------------------------------------------------- SUMMARY: This staff accounting bulletin modifies portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with authoritative accounting guidance and Securities and Exchange Commission rules and regulations. Specifically, the staff is updating the Series in order to bring existing guidance into conformity with the Financial Accounting Standards Board Accounting Standards Codification Topic 321, Investments--Equity Securities. DATES: Effective: January 11, 2018. FOR FURTHER INFORMATION CONTACT: Brian Staniszewski, Professional Accounting Fellow, Office of the Chief Accountant at (202) 551-5300 or Lindsay McCord, Associate Chief Accountant, Division of Corporation Finance at (202) 551-3400, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. SUPPLEMENTARY INFORMATION: The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the federal securities laws. List of Subjects in 17 CFR Part 211 Accounting, Reporting and recordkeeping requirements, Securities. Dated: November 29, 2017. Brent J. Fields, Secretary. Accordingly, part 211 of title 17 of the Code of Federal Regulations is amended as follows: PART 211--INTERPRETATIONS RELATING TO FINANCIAL REPORTING MATTERS 0 1. Add an authority citation for part 211 to read as follows: Authority: 15 U.S.C. 77g, 15 U.S.C. 77s(a), 15 U.S.C. 77aa(25) and (26), 15 U.S.C. 78c(b), 17 CFR 78l(b) and 13(b), 17 CFR 78m(b) and 15 U.S.C. 80a-8, 30(e) 15 U.S.C. 80a-29(e), 15 U.S.C. 80a-30, and 15 U.S.C. 80a-37(a). 0 2. Amend the table in subpart B by adding an entry for Staff Accounting Bulletin No. 117 at the end of the table to read as follows: Subpart B--Staff Accounting Bulletins ---------------------------------------------------------------------------------------------------------------- Subject Release No. Date Fed. Reg. Vol. and page ---------------------------------------------------------------------------------------------------------------- * * * * * * * Publication of Staff Accounting Bulletin SAB-117 1/11/2018 [INSERT Federal Register CITATION]. No. 117. ---------------------------------------------------------------------------------------------------------------- Note: The text of SAB 117 will not appear in the Code of Federal Regulations. Staff Accounting Bulletin No. 117 This staff accounting bulletin modifies portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and Securities and Exchange Commission (``Commission'') rules and regulations. [[Page 1296]] Specifically, the staff is updating the Series in order to bring existing guidance into conformity with the Financial Accounting Standards Board (``FASB'') Accounting Standards Codification (``ASC'') Topic 321, Investments--Equity Securities (``ASC Topic 321''). The FASB adopted ASC Topic 321 through its issuance of Accounting Standards Update No. 2016-01, Financial Instruments--Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The following describes the changes made to the Staff Accounting Bulletin Series that are presented at the end of this release: 1. Topic 5: Miscellaneous Accounting a. Topic 5.M in the Staff Accounting Bulletin Series entitled Other Than Temporary Impairment of Certain Investments in Equity Securities (``Topic 5.M'') is no longer applicable upon a registrant's adoption of ASC Topic 321. Topic 5.M provided the staff's views on evaluating whether an impairment loss should be recognized in net income for investments in equity securities that were measured at fair value with changes in fair value presented in other comprehensive income.\1\ ASC Topic 321 establishes new guidance that eliminates the ability to present changes in the fair value of investments in equity securities within other comprehensive income. After a registrant adopts ASC Topic 321, investments in equity securities that previously qualified for presenting changes in fair value within other comprehensive income will be measured at fair value with changes in fair value presented immediately in net income. Therefore, ASC Topic 321 eliminates the need for Topic 5.M. --------------------------------------------------------------------------- \1\ Prior to the adoption of ASC Topic 321, FASB ASC Topic 320, Investments--Debt and Equity Securities, permitted investments in equity securities with readily determinable fair values to be classified as (1) available-for-sale, with changes in fair value recognized in other comprehensive income, or as (2) trading securities, with changes in fair value recognized in net income. --------------------------------------------------------------------------- Accordingly, the staff hereby amends the Staff Accounting Bulletin Series as follows: * * * * * Topic 5: Miscellaneous Accounting * * * * * M.1. Impact of a Registrant's Adoption of FASB ASC Topic 321, Investments--Equity Securities--Overall Topic 5.M is no longer applicable upon a registrant's adoption of ASC Topic 321. Topic 5.M provided the staff's views on evaluating whether an impairment loss should be recognized in net income for investments in equity securities that were measured at fair value with changes in fair value presented in other comprehensive income. ASC Topic 321 establishes new guidance that eliminates the ability to present changes in the fair value of investments in equity securities within other comprehensive income, which eliminates the need for Topic 5.M. Registrants that have not yet adopted ASC Topic 321 should continue to refer to Topic 5.M. * * * * * [FR Doc. 2018-00352 Filed 1-10-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Rules and Regulations 1295
V. Regulatory Flexibility Act (2) Amount of civil money penalty for Financial Accounting Standards Board
violation of the Act or regulations: The Accounting Standards Codification
Pursuant to section 605(b) of the
maximum daily amount is $1,026 for Topic 321, Investments—Equity
Regulatory Flexibility Act (5 U.S.C. 601
each violation that occurs on or after Securities.
et seq.), the FCA hereby certifies that
January 15, 2018.
this final rule will not have a significant (b) The maximum civil money penalty DATES: Effective: January 11, 2018.
economic impact on a substantial amount assessed under 42 U.S.C. FOR FURTHER INFORMATION CONTACT:
number of small entities. Each of the 4012a(f) is: $385 for each violation that Brian Staniszewski, Professional
banks in the System, considered occurs on or after January 16, 2009, but Accounting Fellow, Office of the Chief
together with its affiliated associations, before July 1, 2013, with total penalties Accountant at (202) 551–5300 or
has assets and annual income in excess under such statute not to exceed Lindsay McCord, Associate Chief
of the amounts that would qualify them $120,000 for any single institution Accountant, Division of Corporation
as small entities. Therefore, System during any calendar year; $2,000 for Finance at (202) 551–3400, Securities
institutions are not ‘‘small entities’’ as each violation that occurs on or after and Exchange Commission, 100 F Street
defined in the Regulatory Flexibility July 1, 2013, but before August 1, 2016, NE, Washington, DC 20549.
Act. with no cap on the total amount of SUPPLEMENTARY INFORMATION: The
List of Subjects in 12 CFR Part 622 penalties that can be assessed against statements in staff accounting bulletins
any single institution during any are not rules or interpretations of the
Administrative practice and calendar year; and $2,133 for each
procedure, Crime, Investigations, Commission, nor are they published as
violation that occurs on or after January bearing the Commission’s official
Penalties. 15, 2018, with no cap on the total approval. They represent interpretations
For the reasons stated in the amount of penalties that can be assessed and practices followed by the Division
preamble, part 622 of chapter VI, title 12 against any single institution during any of Corporation Finance and the Office of
of the Code of Federal Regulations is calendar year. the Chief Accountant in administering
amended as follows: Dated: January 8, 2018. the disclosure requirements of the
Dale L. Aultman, federal securities laws.
PART 622—RULES OF PRACTICE AND
Secretary, Farm Credit Administration Board.
PROCEDURE List of Subjects in 17 CFR Part 211
[FR Doc. 2018–00336 Filed 1–10–18; 8:45 am]
■ 1. The authority citation for part 622 BILLING CODE 6705–01–P Accounting, Reporting and
continues to read as follows: recordkeeping requirements, Securities.
Authority: Secs. 5.9, 5.10, 5.17, 5.25–5.37 Dated: November 29, 2017.
of the Farm Credit Act (12 U.S.C. 2243, 2244, SECURITIES AND EXCHANGE Brent J. Fields,
2252, 2261–2273); 28 U.S.C. 2461 note; and COMMISSION Secretary.
42 U.S.C. 4012a(f). Accordingly, part 211 of title 17 of the
17 CFR Part 211
■ 2. Revise § 622.61 to read as follows: Code of Federal Regulations is amended
[Release No. SAB 117] as follows:
§ 622.61 Adjustment of civil money
penalties by the rate of inflation under the Staff Accounting Bulletin No. 117 PART 211—INTERPRETATIONS
Federal Civil Penalties Inflation Adjustment RELATING TO FINANCIAL REPORTING
Act of 1990, as amended. AGENCY: Securities and Exchange
Commission. MATTERS
(a) The maximum amount of each
ACTION: Publication of Staff Accounting
civil money penalty within FCA’s ■ 1. Add an authority citation for part
Bulletin. 211 to read as follows:
jurisdiction is adjusted in accordance
with the Federal Civil Penalties SUMMARY: This staff accounting bulletin Authority: 15 U.S.C. 77g, 15 U.S.C. 77s(a),
Inflation Adjustment Act of 1990, as modifies portions of the interpretive 15 U.S.C. 77aa(25) and (26), 15 U.S.C. 78c(b),
amended (28 U.S.C. 2461 note), as guidance included in the Staff 17 CFR 78l(b) and 13(b), 17 CFR 78m(b) and
follows: Accounting Bulletin Series in order to 15 U.S.C. 80a–8, 30(e) 15 U.S.C. 80a–29(e),
(1) Amount of civil money penalty make the relevant interpretive guidance 15 U.S.C. 80a–30, and 15 U.S.C. 80a–37(a).
imposed under section 5.32 of the Act consistent with authoritative accounting ■ 2. Amend the table in subpart B by
for violation of a final order issued guidance and Securities and Exchange adding an entry for Staff Accounting
under section 5.25 or 5.26 of the Act: Commission rules and regulations. Bulletin No. 117 at the end of the table
The maximum daily amount is $2,269 Specifically, the staff is updating the to read as follows:
for violations that occur on or after Series in order to bring existing
January 15, 2018. guidance into conformity with the Subpart B—Staff Accounting Bulletins
Subject Release No. Date Fed. Reg. Vol. and page
* * * * * * *
Publication of Staff Accounting Bulletin No. 117 .......... SAB–117 1/11/2018 [INSERT Federal Register CITATION].
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Note: The text of SAB 117 will not appear Staff Accounting Bulletin No. 117 make the relevant interpretive guidance
in the Code of Federal Regulations. consistent with current authoritative
This staff accounting bulletin accounting and auditing guidance and
modifies portions of the interpretive Securities and Exchange Commission
guidance included in the Staff (‘‘Commission’’) rules and regulations.
Accounting Bulletin Series in order to
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![1296 Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Rules and Regulations
Specifically, the staff is updating the impairment loss should be recognized towards the registration threshold of
Series in order to bring existing in net income for investments in equity $150 million. Accordingly, we are
guidance into conformity with the securities that were measured at fair amending the definition of ‘‘assets
Financial Accounting Standards Board value with changes in fair value under management’’ in the rule that
(‘‘FASB’’) Accounting Standards presented in other comprehensive implements the private fund adviser
Codification (‘‘ASC’’) Topic 321, income. ASC Topic 321 establishes new exemption to exclude the assets of
Investments—Equity Securities (‘‘ASC guidance that eliminates the ability to ‘‘small business investment
Topic 321’’). The FASB adopted ASC present changes in the fair value of companies.’’
Topic 321 through its issuance of investments in equity securities within DATES: Effective March 12, 2018.
Accounting Standards Update No. other comprehensive income, which
FOR FURTHER INFORMATION CONTACT:
2016–01, Financial Instruments— eliminates the need for Topic 5.M.
Jennifer Songer, Senior Counsel, or Sara
Overall (Subtopic 825–10): Recognition Registrants that have not yet adopted
Cortes, Assistant Director, at (202) 551–
and Measurement of Financial Assets ASC Topic 321 should continue to refer
6787 or IArules@sec.gov, Investment
and Financial Liabilities. to Topic 5.M.
The following describes the changes Adviser Regulation Office, Division of
* * * * * Investment Management, Securities and
made to the Staff Accounting Bulletin [FR Doc. 2018–00352 Filed 1–10–18; 8:45 am]
Series that are presented at the end of Exchange Commission, 100 F Street NE,
BILLING CODE 8011–01–P
this release: Washington, DC 20549–8549.
SUPPLEMENTARY INFORMATION: The
1. Topic 5: Miscellaneous Accounting Commission is adopting amendments to
SECURITIES AND EXCHANGE
a. Topic 5.M in the Staff Accounting COMMISSION rules 203(l)–1 [17 CFR 275.203(l)\1] and
Bulletin Series entitled Other Than 203(m)–1 [17 CFR 275.203(m)–1] under
Temporary Impairment of Certain 17 CFR Part 275 the Investment Advisers Act of 1940 [15
Investments in Equity Securities (‘‘Topic U.S.C. 80b].1
[Release No. IA–4839; File No. S7–05–17]
5.M’’) is no longer applicable upon a Table of Contents
registrant’s adoption of ASC Topic 321. RIN 3235–AM02
Topic 5.M provided the staff’s views on I. Background
evaluating whether an impairment loss Exemptions From Investment Adviser II. Discussion
should be recognized in net income for Registration for Advisers to Small A. Amendment to Rule 203(l)–1
Business Investment Companies B. Amendment to Rule 203(m)–1
investments in equity securities that III. Effective Date
were measured at fair value with IV. Economic Analysis
AGENCY: Securities and Exchange
changes in fair value presented in other A. Introduction and Economic Justification
Commission.
comprehensive income.1 ASC Topic 321 B. Costs and Benefits
establishes new guidance that ACTION: Final rule. C. Efficiency, Competition, and Capital
eliminates the ability to present changes Formation
SUMMARY: We are adopting amendments V. Paperwork Reduction Act Analysis
in the fair value of investments in equity to the rule that defines a venture capital
securities within other comprehensive VI. Regulatory Flexibility Act Certification
fund (rule 203(l)–1) and the rule that VII. Statutory Authority
income. After a registrant adopts ASC implements the private fund adviser
Topic 321, investments in equity exemption (rule 203(m)–1) under the I. Background
securities that previously qualified for Investment Advisers Act of 1940 (the Prior to the enactment of the Fixing
presenting changes in fair value within ‘‘Advisers Act’’) in order to reflect America’s Surface Transportation Act of
other comprehensive income will be changes made by title LXXIV, sections 2015 (the ‘‘FAST Act’’),2 we believe that
measured at fair value with changes in 74001 and 74002 of the Fixing investment advisers to small business
fair value presented immediately in net America’s Surface Transportation Act of investment companies (‘‘SBICs’’) 3
income. Therefore, ASC Topic 321 2015 (the ‘‘FAST Act’’), which amended primarily relied upon an exemption
eliminates the need for Topic 5.M. sections 203(l) and 203(m) of the
Accordingly, the staff hereby amends
Advisers Act. Title LXXIV, section 1 Unless otherwise noted, when we refer to the
the Staff Accounting Bulletin Series as Advisers Act, or any paragraph of the Advisers Act,
74001 of the FAST Act amended the
follows: we are referring to 15 U.S.C. 80b of the United
exemption from investment adviser States Code [15 U.S.C. 80b], at which the Advisers
* * * * * registration for any adviser solely to one Act is codified, and when we refer to Advisers Act
Topic 5: Miscellaneous Accounting or more ‘‘venture capital funds’’ in rules, or any paragraph of these rules, we are
Advisers Act section 203(l) by deeming referring to title 17, part 275 of the Code of Federal
* * * * * ‘‘small business investment companies’’ Regulations [17 CFR part 275], in which these rules
are published.
M.1. Impact of a Registrant’s Adoption to be ‘‘venture capital funds’’ for 2 Public Law 114–94, 129 Stat. 1312 (Dec. 4,
of FASB ASC Topic 321, Investments— purposes of the exemption. 2015).
Equity Securities—Overall Accordingly, we are amending the 3 An SBIC is (other than an entity that has elected
definition of a venture capital fund to to be regulated or is regulated as a business
Topic 5.M is no longer applicable development company pursuant to section 54 of the
include ‘‘small business investment
upon a registrant’s adoption of ASC Investment Company Act of 1940): (A) A small
companies.’’ Title LXXIV, section 74002 business investment company that is licensed
Topic 321. Topic 5.M provided the
of the FAST Act amended the under the Small Business Investment Act of 1958
staff’s views on evaluating whether an (‘‘SBIA’’), (B) an entity that has received from the
exemption from investment adviser
Small Business Administration notice to proceed to
registration for any adviser solely to
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1 Prior to the adoption of ASC Topic 321, FASB qualify for a license as a small business investment
ASC Topic 320, Investments—Debt and Equity ‘‘private funds’’ with less than $150 company under the SBIA, which notice or license
Securities, permitted investments in equity million in assets under management in has not been revoked, or (C) an applicant that is
securities with readily determinable fair values to Advisers Act section 203(m) by affiliated with 1 or more licensed small business
be classified as (1) available-for-sale, with changes investment companies described in subparagraph
in fair value recognized in other comprehensive
excluding the assets of ‘‘small business (A) and that has applied for another license under
income, or as (2) trading securities, with changes in investment companies’’ when the SBIA, which application remains pending.
fair value recognized in net income. calculating ‘‘private fund assets’’ Advisers Act section 203(b)(7).
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Document Created: 2018-01-11 04:54:01
Document Modified: 2018-01-11 04:54:01
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Publication of Staff Accounting Bulletin. | |
| Dates | Effective: January 11, 2018. | |
| Contact | Brian Staniszewski, Professional Accounting Fellow, Office of the Chief Accountant at (202) 551-5300 or Lindsay McCord, Associate Chief Accountant, Division of Corporation Finance at (202) 551-3400, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. | |
| FR Citation | 83 FR 1295 | |
| CFR Associated | Accounting; Reporting and Recordkeeping Requirements and Securities |
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