The FASB, the nation’s developer of U.S. GAAP, closed out 2022 having issued six narrow accounting standards, a drop from the last five years much to the glee of the accounting profession.
In 2021, the board issued 10 new accounting standard updates (ASUs); in 2020, 11 were issued; in 2019, 12; and in 2018, 20, according to the board’s website. The FASB’s record breaking year for the past two decades took place in 2010 with 29 new standards issued.
This year’s falloff comes during a pivotal year for the board, which over the past year had been doing outreach broadly via an agenda consultation process to set its five-year agenda for 2022 to 2026. As part of that effort, the board streamlined its technical agenda, dropped some projects and revised others.
“In June 2022, the Board completed its 2021 agenda consultation process to ensure its agenda reflects the priorities of investors and other stakeholder groups,” a FASB spokesperson said on Dec. 29. “With that agenda in place, the Board has already made significant progress on priority projects and will continue to do so in 2023.”
Accountants have for years complained that too many accounting standards were being issued by the FASB, some suggesting it push pause for a while to enable the system to properly digest them. This year’s accounting standards are narrow, mostly amendments to broader standards that were previously issued.
Specifically, they are:
- ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method;
- ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures;
- ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions;
- ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations;
- ASU No. 2022-05, Financial Services—Insurance (Topic 944): Transition for Sold Contracts;
- ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.
The FASB also issued nine proposals to solicit public comment, including two related rate reform and insurance contracts that are among the six ASUs.
Currently, the board has 19 projects on its main technical agenda, including three conceptual framework topics, segment expense disclosures, income taxes paid, cryptocurrencies and accounting for software costs, according to the latest update as of Dec. 21.
Furthermore, its research agenda has eight projects, including on government grants, financial instruments with environmental, social and governance (ESG)-linked features, and financial key performance indicators for business entities.
Moreover, three broad standards — Topic 326, Credit Losses, Topic 606, Revenue from Contracts with Customers, and Topic 842, Leases — are under post-implementation-review (PIR), its process to determine whether a standard worked as intended.
This article originally appeared in the December 30, 2022 edition of Accounting & Compliance Alert, available on Checkpoint.
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