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Can a public company continue to use transitional elements intended to be used by nonpublic entity after adoption of new guidance?

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  • Mike
    Hi Tippi!

    Great question! This has actually been a more recent topic at the FASB regarding XBRL tagging as it relates to accounting adoption, specifically prospective and cumulative-effect adjustment adoption methods. While there has been inconsistencies in approach and different information provided via Taxonomy Implementation Notes (TINs), the FASB has provided prior specific ASU guidance around the use to two different elements when prior year values have not been restated due to an ASU adoption method.  Our understanding, at Workiva, is that if prior year numbers have not been restated or adjusted per the new accounting guidance, the transitional elements can be applied to these prior year numbers. For current period numbers, it expected the new elements (if applicable) will be utilized.

    As noted above, this could therefore lead to two different elements being applied (new element on current year and transitional element on prior year). In addition, this topic is currently under discussion and could lead to possible updates or further clarification on approach in the future.

    Hope this helps! Holler if you have any additional questions or need anything else. Thanks, and happy Friday!
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  • Tippi Han
    Hi Mike - Many thanks for your quick response. Hope you have a Happy Friday and good weekend! 

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