The FASB will discuss public feedback received from its agenda consultation document later this year through early next year, a process to ensure it properly allocates resources and stays the course of its mission to service U.S. companies, according to remarks by board Chair Richard Jones.
The board in late June issued Invitation-to-Comment (ITC) No. 2021-004 , Agenda Consultation, to solicit broad public input about which accounting topics should be added to its five-year technical agenda.
“What we learn from this process will help ensure we continue to allocate resources to achievable standard-setting projects that fulfill our primary mission of improving financial accounting and reporting standards and addressing topics that are of the highest priority to our stakeholders,” Jones said in a quarterly board update, posted on August 24, 2021.
One of his priorities as chair is “to stay focused on projects that we can, in fact, bring to a successful conclusion,” Jones wrote.
“Since mid-2020, we’ve moved through each project on our agenda, setting a course for completing those that present an achievable path to standard setting—and removing those that don’t,” said Jones. “During the second quarter, we reached 95 percent completion of this existing agenda review. I expect we will complete the rest shortly—just in time to create more capacity for priority projects that surface as a result of the agenda consultation process.”
Jones made similar remarks at a board trustee meeting on the same day as the posting.
Outreach by the board to date has included hundreds of its constituents toward the development of the ITC, according to a FASB summary to investors.
Specifically, during the first half of 2021, FASB members and staff members met virtually with more than 200 of its stakeholders—more than 70 of them investors or other financial statement users—including all advisory groups.
From those discussions, FASB identified and floated four broad areas of potential board focus in the ITC, including: providing more disaggregration/granularity of financial information; providing more guidance around emerging areas in financial reporting; re-evaluating specific areas of GAAP to reduce unnecessary cost and complexity; and enhancing and providing more education around certain FASB standard-setting processes to help increase transparency and communication.
Comments on the ITC are due by September 22. Only six respondents wrote in so far, mostly individual CPAs, according to the board’s website on September 7.
The ITC comes at a time when the board has been undertaking a post-implementation review (PIR) of three broad standards on current expected credit losses (CECL), leases, and revenue recognition – another major initiative.
The PIR is a process that vets major accounting standards to determine whether they worked as intended or if there are unforeseen wrinkles that need to be ironed out.
As part of the PIR, for example, the board held roundtables on the CECL standard in the second quarter, which resulted in a board project added in July “to address the accounting for troubled debt restructurings by creditors for entities that have adopted CECL and a project to address the accounting for acquired financial assets,” said Jones.
The board will “also continue to perform outreach with stakeholders on leases and revenue recognition, addressing issues as they arise,” he said.
This article originally appeared in the September 8, 2021 edition of Accounting & Compliance Alert, available on Checkpoint.
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