U.S.

GAAP Checklist Tool —

Quarterly Update: Fourth Quarter
December 2018
Use of This Quarterly Update
The U.S. GAAP Checklist Tool (the “Checklist Tool”) has been revised to reflect updates to professional
pronouncements from October 1, 2018, through December 31, 2018. This supplement describes the
changes to the FASB Accounting Standards Codification (the “Codification”) issued as Accounting
Standards Updates (ASUs) for the most recent quarter, October 1, 2018 through December 31, 2018.

Updating the Checklist Tool

Users of the Checklist Tool who initiated a checklist prior to this update and determine that one or
more of the ASUs issued affect the period under audit will need to do the following:

 Request the Deloitte engagement team to initiate a new checklist. This new checklist will
supplement the previous checklist created.
 Using the list of updated guidance below, scope in only the applicable updated guidance. To
determine whether the guidance applies, users may view the updated guidance in the checklist by
expanding the Codification tree to the Subsection level and clicking on the Subsection title (usually
“General”). The updated guidance generally will appear as “pending content” in the Codification.
Transition guidance is linked to pending content paragraphs. Section 15 of each respective ASC
Topic within the Codification can be viewed to determine if the guidance applies to the entity. The
preparer may also consider Section 55 of each respective ASC Topic within the Codification for
implementation guidance and illustrations.
 Once the scoping is complete, click “Submit Scoping.” The new checklist will include only
questions related to the guidance that was scoped into that checklist. See the Client User Guide
(December 2011) for additional guidance.
 Accounting Guidance Issued During Quarter

Substantive Checklist Tool Updates

 When the FASB amends the Codification with an ASU, each paragraph that was amended by
the ASU is left unchanged (for entities that have not adopted the ASU) but is followed by a
paragraph containing “pending content.” Entities that adopt an ASU need to complete the
amended Subtopic using the pending content for each paragraph that was amended.

There were five ASUs issued by the FASB through December 31, 2018:

 ASU 2018-16, Derivatives and Hedging (Topic 815) — Inclusion of the Secured
Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark
Interest Rate for Hedge Accounting Purposes.
 ASU 2018-17, Consolidation (Topic 810) — Targeted Improvements to Related Party
Guidance for Variable Interest Entities.
 ASU 2018-18, Collaborative Arrangements (Topic 808) — Clarifying the Interaction
Between Topic 808 and Topic 606.
 ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit
Losses.
 ASU 2018 -20, Leases (Topic 842) — Narrow-Scope Improvement for Lessors.

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Changes Reflected in the Checklist Tool

The following Subtopics and Sections represent the primary guidance that was amended within the
Checklist Tool as the result of the ASUs issued during the most recent quarter as noted above. For
detailed amendments to other Subtopics and Sections (i.e., Section 55 (Implementation Guidance and
Illustrations), Section 65 (Transition and Effective Date Information), Section S99 (SEC Guidance)),
refer to the specific ASU.

 ASU 2018-16, Derivatives and Hedging (Topic 815) — Inclusion of the Secured
Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark
Interest Rate for Hedge Accounting Purposes.

This ASU permits the use of Overnight Index Swap (OIS) rate based on the Secured Overnight
Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under
ASC 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds
Effective Rate, and the SIFMA Municipal Swap Rate. As a result of this ASU, the following Sections
have been updated in the Checklist Tool:

 ASC 815-20-25, Derivatives and Hedging — Hedging — General — Recognition.

The following section has not been updated in the Checklist Tool because there are not questions
in the Tool related to the glossary, but the section was amended to add a definition of SOFR OIS:

 ASC 815-20-20, Derivatives and Hedging — Hedging — General — Glossary.

Effective Date and Transition:

For entities that have not yet adopted ASU 2017-12, the amendments in this Update are required to
be adopted concurrently with the amendments set forth in ASU 2017-12.
For public business entities that already have adopted ASU 2017-12, the amendments are effective
for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. For
all other entities that have already adopted ASU 2017-12, the amendments are effective for fiscal
years beginning after December 31, 2019, and interim periods within those fiscal years.
The amendments should be adopted on a prospective basis for qualifying new or redesignated
hedging relationships entered into on or after the date of adoption.

 ASU 2018-17, Consolidation (Topic 810) — Targeted Improvements to Related Party

Guidance for Variable Interest Entities.

This ASU allows a private company reporting entity to elect to not apply the VIE guidance to legal
entities under common control if both the parent and the legal entity being evaluated are not
public business entities. Additionally, the ASU clarifies that indirect interests held through related
parties in common control arrangements should be considered on a proportionate basis for
determining whether fees paid to decision makers and service providers are variable interests. As
a result of this ASU, the following sections have been updated in the Checklist Tool:

 ASC 810-10-50, Consolidation — Overall — Disclosure.

The following sections have not been updated in the Checklist Tool because there are not
questions in the Tool related to scope for private companies and implementation guidance on

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 decision maker fees, but are important consideration points for entities to determine if the ASU
may impact an entity:

 ASC 810-10-15, Consolidation — Overall — Scope and Scope Exceptions.

 ASC 810-10-55, Consolidation — Overall — Implementation.

Effective Date and Transition:

For public business entities, the ASU is effective for fiscal years beginning after December 15, 2019
and interim period within those fiscal years. For all other entities, the amendments are effective for
fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning
after December 15, 2021.
The amendments should be adopted retrospectively with a cumulative-effect adjustment to retained
earnings at the beginning of the earliest period presented. Early adoption is permitted.

 ASU 2018-18, Collaborative Arrangements (Topic 808) — Clarifying the Interaction

Between Topic 808 and Topic 606.

The ASU clarifies that certain transactions between collaborative arrangement participants should
be accounted for under Topic 606 when the collaborative arrangement participant is a customer in
the context of a unit of account and in those situations all of Topic 606 should be applied.
Additionally, unit-of-account guidance was added to Topic 808 to be consistent with such guidance
in Topic 606 when an entity is assessing whether the collaborative arrangement or part of the
collaborative arrangement is within Topic 606. Lastly, the ASU precludes an entity from presenting
a transaction with a collaborative arrangement participant that is not directly related to sales to
third parties with revenue recognized under Topic 606 if the collaborative arrangement partner is
not a customer. As a result of this ASU, the following sections have been updated in the Checklist
Tool:

 ASC 808-10-45, Collaborative Arrangements — Overall — Other Presentation Matters.

The following sections have not been updated in the Checklist Tool because there are not
questions in the Tool related to scope, but are important consideration points for entities to
determine if the ASU may impact an entity:

 ASC 606-10-15, Revenue from Contracts with Customers — Overall — Scope and Scope
Exceptions.
 ASC 808-10-15, Collaborative Arrangements — Overall — Scope and Scope Exceptions.

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 Effective Date and Transition:

For public business entities, the ASU is effective for fiscal years beginning after December 15, 2019,
and interim periods within those fiscal years. For all other entities, the amendments are effective for
fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning
after December 15, 2021. Early adoption is permitted, but an entity cannot early adopt the Update
prior to adopting the provisions of Topic 606.
The amendments should be adopted retrospectively to the date of initial adoption of Topic 606. An
entity should recognize the cumulative effect of initially applying the amendments as an adjustment
to the opening balance of retained earnings of the later of the earliest annual presented or the
annual period that includes the date of initial adoption of Topic 606.

 ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit

Losses.

The ASU provides clarification related to certain areas of Topic 326 raised by stakeholders leading
up to adoption. The Update clarifies that the effective date of ASU 2016-13 (which includes Topic
326) for nonpublic business entities is for fiscal periods beginning after December 15, 2021. The
amendment also clarifies that receivables arising from operating leases are not in the scope of
Topic 326 and instead should be accounted for in accordance with Topic 842. The ASU did not
result in the modification of any sections of the Checklist tool.

The following sections have not been updated in the Checklist Tool because there are not
questions in the Tool related to transition and scope, but are important consideration points for
entities to determine if the ASU may impact an entity:

 ASC 326-10-65, Financial Instruments — Credit Losses — Overall — Transition and Open
Effective Date Information.
 ASC 326-20-15, Financial Instruments — Credit Losses — Measured at Amortized Cost —
Scope.

Effective Date and Transition:

The effective date of the amendments included in the ASU is consistent with the effective date and
transition method for ASU 2016-13.

 ASU 2018-20, Leases (Topic 842) — Narrow-Scope Improvement for Lessors.

The ASU amends Topic 842 in response to feedback raised on implementation issues of the new
leasing standard raised by lessors. The Update amends the guidance for lessors on (1) sales tax
and other similar taxes collected from lessees, (2) certain lessor costs paid directly by lessees, and
(3) recognition of variable payments for contracts with lease and non-lease components. As a
result of this ASU, the following sections have been updated in the Checklist Tool:

 ASC 842-30-50, Leases — Lessor — Disclosures.

The following section has not been updated in the Checklist Tool because there are not questions
in the Tool related to scope, but the section provides important consideration points for entities to

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 determine if the ASU may impact an entity:
 ASC 842-10-15, Leases — Overall — Scope and Scope Exceptions.

Effective Date and Transition:

The effective date of the amendments included in the ASU is consistent with the effective date and
transition method for ASU 2016-02. For public business entities, the Updates will be effective for
fiscal periods beginning after December 15, 2018, and interim periods within that year. For non-
public business entities, the Update will be effective for fiscal periods beginning after December 15,
2019 and interim periods beginning after December 15, 2020. Early adoption is permitted.
For entities that have already adopted the Updates in ASU 2016-02 (as codified as Topic 842), the
entity should apply the amendments at the original effective date of Topic 842 or has the option to
apply the amendments in either the first reporting period ending after the issuance of this Update or
in the first reporting period beginning after the issuance of this Update. The amendments may be
applied retrospectively or prospectively for entities that have already adopted Topic 842.

Deloitte & Touche LLP is not, by means of the U.S. GAAP Checklist Tool and this quarterly update (12-
18), rendering accounting or other professional advice or services. The checklists are not a substitute
for professional advice or services, nor should they be used as the basis for any decision or action that
may affect your business.

Deloitte & Touche LLP shall not be responsible for any loss sustained by any person who relies on the
checklists.

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