There are a lot of balls in the air currently when it comes to compliance, making it challenging for CFOs to stay on top of a wide range of changes.
The new revenue recognition standard is one of the biggest compliance concerns looming today. The new standard from the Financial Accounting Standards Board (FASB) significantly increases the amount of information companies are required to disclose about their revenue activities and related transactions.
Although the new disclosure requirements don’t take effect for many companies until 2018, that doesn’t mean they can wait until the end of next year to deal with them. This is particularly true for public companies registered with the SEC.
CFOs are also grappling with upcoming changes to the lease accounting standard that will have a significant impact on the finance team. The new lease accounting standards, issued by the FASB and the International Accounting Standards Board (IASB), require companies to elevate leased assets and related liabilities out of footnote disclosures and onto the face of their balance sheets. The standards go into effect for public companies in 2019 and private companies in 2020.
In addition, the SEC’s pay-ratio rule is slated to take effect for fiscal years of SEC registrants beginning after December 31, 2017, meaning that the first disclosures will be made in early 2018.
Even for some well-established regulations such as the Sarbanes-Oxley Act (SOX) and standard SEC filings required of all public companies, compliance remains dynamic and complicated to master.
And this list only scratches the surface of the compliance matters that CFOs can’t afford to ignore.
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A CFO's Guide to Compliance
With diligent preparation and the right team, companies can stay in the good graces of regulators in the wake of upcoming changes.