FASB Chair Richard Jones told a conference on December 5, 2023, that the board will roll out a new process next year that will leverage the work of the Emerging Issues Task Force (EITF), a special panel that addresses technical accounting issues that come from applying U.S. GAAP.
The EITF will have control of its own agenda, deliberate issues but “the output of an EITF consensus will simply be a recommendation to the FASB in the form of an agenda request with a proposed solution,” Jones said at the AICPA & CIMA Conference on Current SEC and PCAOB Developments. “We think this will enable them to identify issues on a timely basis, talk about those issues and make recommendations to us,” he said. “I think it’ll also be a way for us to better leverage that very talented group of people that we bring in and volunteer their time to help us stay ahead of emerging issues.”
The EITF, which was formed in 1984, evolved over time. There was a period – decades ago – whereby the unit controlled its own agenda, dealing in some cases with 30 to 40 issues a year. The task force’s decisions took effect right after it held meetings but over time that process changed and the panel’s process became part of the FASB’s full process.
Today, the EITF has a limited mandate though broader than board advisory bodies. It is composed of 12 members and is chaired by FASB Technical Director Hillary Salo. The Task force can only address projects the board puts on its agenda, typically technical matters that accountants find confusing and therefore have created “diversity in practice.”
The topic of the EITF’s role was publicly mentioned two years ago by Jones who observed comment letter responses to the board’s Invitation-to-Comment (ITC) No. 2021-004, Agenda Consultation, spoke on the issue.
Specifically, some comment letters to the ITC suggested that the board consider leveraging the EITF so that it carries the same weight and is as nimble as the IFRS Interpretations Committee—IFRIC—the panel that works alongside the IASB, the board that develops IFRS standards. The IFRIC establishes its own agenda in response to questions about the application of IFRS Accounting Standards and does other work at the request of the IASB.
The FASB’s new plan for the EITF won’t elevate the panel to the IFRIC’s level but it moves the needle close.
This article originally appeared in the December 6, 2023, edition of Accounting & Compliance Alert, available on Checkpoint.
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