The FASB revised its first quarter plans and will now issue two new accounting standards and two proposals by the end of the month, according to a revised technical agenda, posted on March 2, 2023.
The board is sticking with plans to issue a new accounting standard on investments in tax credit structures, but recently voted to also issue a standard on related-party leases that are under the control of a common owner, by the end of this year’s first quarterly reporting period.
Proposals for public comment will also still be issued on accounting and disclosure of crypto assets and on improvements to income tax disclosures, the agenda reveals. However, a proposal on profits interest awards for applying stock compensation rules, was moved to the second quarter.
The FASB’s technical agenda’s timeline is always tentative and therefore can change. The board, for example, initially planned to issue one new standard and three proposals by the end of the quarter. (See FASB to Issue One New Accounting Standard and Three Proposals This Quarter in the Feb. 8, 2023, edition of Accounting & Compliance Alert.)
The standard on investments in tax credit structures will extend a simple accounting approach that today is limited to low-income housing tax credit (LIHTC) investments to other federal tax credit programs that attract tax equity investments. The rules to extend the proportional amortization method were worked on by the FASB’s Emerging Issues Task Force (EITF) and will take effect next year for public companies.
The provisions for related-party leases that are under common control was approved by the board in February, including provisions for leasehold improvements that will be applicable to public companies. The guidance will amend Topic 842, Leases, and will take effect for fiscal years beginning after Dec. 15, 2023, with earlier application allowed. Three board members dissented over the portion on leasehold improvements. (See FASB Votes to Issue Accounting Rule Changes for Leases Under Common Control by End of March in the Feb. 16, 2023, edition of ACA.)
In terms of proposals, the FASB on Feb. 1 said the public will get 75 days to comment on a proposal on accounting and disclosure rules for cryptocurrencies, provisions aimed at reflecting the underlying economics of Bitcoin and other tokens on the balance sheet. The guidance comes after a strong push from the crypto sector, which for years pressed for the rules, the first explicit crypto standard in U.S. GAAP. A final standard is expected to be issued by year-end.
The accounting profession, moreover, will get 75 days to submit feedback on proposed disclosure rules about income taxes companies pay in the U.S. and in foreign countries. The proposal recently received criticism from group executives at the U.S. Chamber of Commerce, who expressed concerns that it would require companies to disclose too much information, among other reasons. If finalized, the proposal will become U.S. GAAP by year-end. (See FASB Runs into Opposition from U.S. Chamber of Commerce on Coming Income Tax Disclosure Proposal in the Feb. 15, 2023, edition of ACA.)
This article originally appeared in the March 7, 2023 edition of Accounting & Compliance Alert, available on Checkpoint.
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