1. FASB Update

2. Major Projects Update Revenue Recognition – ASU 2014-09 issued, implementation deferred until 2018 Leases – projecting final standard in 4 th quarter 2015 Financial Instruments – Classification & measurement – projecting final standard 4th quarter 2015 – Impairment – projecting final standard 4 th quarter 2015 – Hedging – initial deliberations

3. ASU 2015-01 Eliminates extraordinary items as a reporting option on income statement Keeps the definitions of unusual in nature and infrequent in occurrence Reporting requirements for items that are one of the above not changed Determination of annual effective tax rate for interim reporting not changed Effective for periods beginning after December 15, 2015

4. Stmt No. 4 2002 2001 2000 1999 1998 Frequency 13.23% 13.24% 10.36% 9.35% 8.50% Post-Stmt 42013 2012 2011 2010 2009 Frequency 0.05% 0.08% 0.15% 0.18% 0.23%

5. ASU 2015-02 Changes in VIE consolidation model Main affects – More likely to have to evaluate LLPs for possible consolidation – Interests held in VIE by related party less likely to cause reporting enterprise to consolidate VIE – Fees paid to decision maker or service provider less likely to be considered a variable interest in VIE

6. ASU 2015-03 Requires debt issuance costs be accounted for as a reduction of the carrying amount of debt No change in recognition or measurement provisions Applied retrosprectively Public – fiscal years beginning after December 15, 2015 Others – fiscal years beginning after December 15, 2016

7. ASU 2015-04 Practical expedient for measurement date on defined benefit plans Applies when fiscal year end does not coincide with month end Allows measurement of plan assets and benefit obligation as month end nearest to fiscal year end Certain events occurring between month end and fiscal year end may result in remeasurement Public companies – effective for fiscal years beginning after December 15, 2015 Others – fiscal years beginning after December 15, 2016

8. ASU 2015-05 Customer accounting for fees paid in cloud computing arrangement Provides guidance on whether a cloud computing arrangement includes a software license If license is included, account for license consistent with other licenses If license not included, account for arrangement as service contract Effective fiscal years beginning after December 15,2015 May be adopted prospectively or retrospectively

9. ASU 2014-18 Provides an option for private companies related to recognition of identifiable intangibles in a business combination If election made, no recognition separate from goodwill is necessary for: – Customer-related intangibles unless they are capable of being sold or licensed separately from the other assets of the entity – Noncompetition agreements

10. ASU 2014-17 Gives acquired entity the option to apply push-down accounting procedures in the reporting period in which a change-in-control event occurs. If option is made in a subsequent period, it is considered a change in accounting principle. Once option made it is irrevocable. If change made in period of change-in-control event, disclosures should reader to evaluate effects of change. Effective on November 18, 2014.

11. ASU 2014-15 Going Concern Going concern is presumed as basis of financial reporting unless liquidation becomes imminent If liquidation is not imminent, there may be conditions/events that raise substantial doubt about entity’s ability to continue as going concern Prior to ASU 2014-15 there was no guidance related to management’s responsibility to assess and respond to these conditions/events

12. Main Provisions Management, at each financial statement date, should assess whether there are conditions/events that raise substantial doubt about entity’s ability to continue as going concern Timeframe for continuing is one year from date financial statements are issued Substantial doubt exists if it is probable entity will not be able to meet its obligations within this timeframe

13. If substantial doubt exists management must determine whether its plans to mitigate conditions/events will alleviate substantial doubt This determination focuses both on probability of plans being implemented and probability of success if implemented

14. ASU 2014-08 Discontinued Operations Big change is what constitutes a discontinued operation, either of following A component of the an entity that Has been disposed of, meets the criteria to be classified as held-for-sale, or has been abandoned/spun-off; and Represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, or Is a business or nonprofit activity that, on acquisition, meets the criteria to be classified as held-for-sale Continuing involvement with discontinued operation not longer relevant

15. Strategic Shift? Examples are disposals of a major geographic area, major line of business, or major equity method investment Illustrations provided in ASU but no definitive bright-line tests, judgment required Allowing equity method investments is new Oil & gas properties accounted for under full- cost method still precluded

16. Reporting Requirements Income statement remains the same Balance sheet requires separate reporting of discontinued operations’ assets and liabilities for current year and any prior years shown for comparative purposes Expanded disclosures about discontinued operations’ major assets and liabilities, major line items for its results of operations, & its cash flows