The FASB plans to complete most of the projects on its technical agenda in the next 18 months and may therefore issue another agenda consultation next year, Chair Richard Jones said on May 9, 2023.
“You are going to see our agenda whittle down fairly quickly I believe over the next year-and-a-half and as it does so – while we will naturally have items added just from input from stakeholders – there is going to come a time where I think it will be a similar agenda outreach as we did back in ‘21,” he told trustees of the Financial Accounting Foundation (FAF) Standard-Setting Process Oversight Committee. “I do think though that it’s key that we complete many of the projects that we’ve heard about from the last agenda outreach before doing that because I think that’s helpful for our stakeholders, but I do see that probably sometime next year that it may be time to launch another agenda outreach.”
The agenda outreach Jones mentioned is Invitation-to-Comment (ITC) No. 2021-004, Agenda Consultation, which was issued in June 2021 to solicit comment from the accounting profession about what should be the board’s five-year priorities from 2022 to 2026. Agenda consults are typically issued every five years. The prior one was issued in 2016.
The FASB’s agenda outreach lead the board to the current 18 projects on its technical agenda, including the conceptual framework; and seven projects on its research agenda.
Jones’s insights were in response to Oversight Committee Co-Chair Timothy Ryan, who observed “there’s a lot on the agenda these days coming out of the consultation process,” and asked how are the FASB’s resources “holding up…..given the amount of work that you’ve undertaken?”
“I think the resourcing is appropriate,” Jones replied, further explaining that this stemmed from having focused projects and a board vision of the way they are going to progress to conclusion which helps to guard the course of the work. “One of the things that we’re doing in each board meeting, when we talk about next steps, we’re making sure it’s clear that it’s the next steps that the majority of the board wants to pursue,” he said. “And so, I think that’s helping us with resources; I think we’re in good shape.”
The Oversight Committee is one of several established by the FAF, the trustee board with oversight of the FASB’s adequacy, transparency, independence, and efficiency in its development of the U.S. Generally Accepted Accounting Principles (GAAP) for the nation’s capital marketplace. The meeting is the first of its kind to be open to the public as part of trustee efforts to improve transparency around board oversight.
So far this year, the FASB has already issued two new accounting standards — Accounting Standards Update (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); and ASU No. 2023-01, Leases (Topic 842): Common Control Arrangements — plus two exposure drafts for public comment: Proposed ASU No. 2023-ED100, Income Taxes (Topic 740): Improvements to Income Tax Disclosures with a May 30 deadline; and Proposed ASU No. 2023-ED200, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, with a June 6 deadline.
Profits Interest Proposal Issued
On May 11 the board proposed four illustrative examples that would clarify when to use Topic 718, Compensation—Stock Compensation, to account for profits interest awards, which are a form of compensation that provide an interest in a partnership’s future profits. The proposal was initially slated for April issuance.
Also coming during the second quarter are the following two proposals and one final concepts statement:
- Exposure draft on Financial Instruments—Credit Losses(Topic 326)—Acquired Financial Assets
- Exposure draft on Disaggregation—Income Statement Expenses
- Conceptual Framework Chapter 2 on The Reporting Entity
Slated for issuance for either the second or third quarter are ASUs on:
- Joint Venture Formations
- Disclosure Improvements in Response to the SEC’s Release on Disclosure Update and Simplification
- Segment Reporting
For the second half of the year – anytime from July to December – the following are expected to be issued:
- ASU on Codification Improvements—Amendments to Remove References to the Concepts Statements
- Exposure draft on Interim Reporting—Narrow-Scope Improvements
- Final Conceptual Framework Chapter 5 on Recognition and Derecognition
This article originally appeared in the May 10, 2023 edition of Accounting & Compliance Alert, available on Checkpoint.
Get all the latest tax, accounting, audit, and corporate finance news with Checkpoint Edge. Sign up for a free 7-day trial today.