FASB Revises Fourth Quarter Agenda Outlook: Three New Standards, Two Proposals Left to Come by Year-End

The FASB revised its fourth quarter technical agenda on Oct. 10, 2023, to showcase that the board will issue three new accounting standards and two proposals by year-end—a change from the six new rules that were initially set to run.

The revisions mean that the narrow illustrative rule on profits interest awards; improvements to the GAAP codification to remove concepts references; and potential revisions to interim reporting will not be issued until next year – moved to 2024’s first quarter lineup. Rules on purchased financial assets are also slated for issuance the first part of next year.

This year’s fourth quarter will still see new accounting standards on segment expense disclosures; targeted disclosures for cash taxes paid in the U.S. and overseas; and accounting for and disclosure of crypto assets, according to the new agenda lineup. All three standards are significant.

Further, the two proposals to come are on induced conversions of convertible debt instruments; and on a conceptual framework chapter on the concept of measurement – both of which are still on track for the quarter, the agenda says.

The board initially had tentative plans to issue six new standards and two proposals by the end of December, with a caveat that there could be slippage in timing. (See Fourth Quarter Outlook: FASB Could Issue Six New Accounting Standards, Two Proposals by Year-End in the Oct. 4, 2023, edition of Accounting & Compliance Alert.)

Four New FASB Standards Issued This Year to Date

To date this year, the board has issued four new accounting standards, five proposals, plus separately two technical updates to streamline the GAAP codification.

Specifically, on Oct. 9, the board issued Accounting Standards Update (ASU) No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. (See FASB Publishes New Accounting Standard to Incorporate 14 SEC Disclosure Rules into GAAP in the Oct. 10, 2023, edition of Accounting & Compliance Alert.)

Also issued between March and August were:

• ASU No. 2023-01, Leases (Topic 842): Common Control Arrangements, which takes effect for fiscal years beginning after Dec. 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. (See New FASB Accounting Rules Issued for Leases Between Related Businesses with a Common Owner in the March 28, 2023, edition of Accounting & Compliance Alert.)
• ASU No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force), which takes effect for public companies for fiscal years beginning after Dec. 15, 2023, including interim periods within those fiscal years, and for all other entities, for fiscal years beginning after Dec. 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. The guidance must be applied on either a modified retrospective or a retrospective basis with certain exceptions. (See Newly Issued FASB Accounting Rule Offers Simpler Way to Report Federal and State Tax Credit Investments in the March 30, 2023, edition of ACA.)
• ASU No. 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which takes effect prospectively for all joint venture formations with a formation date on or after Jan. 1, 2025. Additionally, a joint venture that was formed before Jan. 1, 2025 may elect to apply the amendments retrospectively if it has sufficient information. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively. (See FASB Issues New Standard on Accounting for Joint Venture Formations in Aug. 24, 2023, edition of ACA.)

The two ASUs that streamline the codification for users (i.e. not stemming from FASB deliberations) are:

• No. 2023-04, Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 121 (SEC Update), which was issued in July; and
• No. 2023-03, Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X: Income or Loss Applicable to Common Stock (SEC Update), which was issued in August.