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FASB

Plethora of New FASB Rules Spurring Job Growth in Accounting Profession, Study Claims

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

By Denise Lugo

The number of U.S. jobs for accountants, auditors, and financial specialists will continue to climb over the next five years, faster than growths in other occupations—driven by new FASB standards, a study by Accounting Principals, a division of Adecco Group, a global 500 staffing services company, says.

Much of the demand for accounting and finance professionals stems from new compliance standards, according to the report, 2020 Accounting & Finance Salary Guide , issued October 8, 2019, by the Jacksonville, Florida–based company.

“New revenue recognition and lease accounting standards from the Financial Accounting Standards Board has created a need for professionals who can diagnose the need for new policies, revise existing procedures, update software and install new accounting and finance systems,” the text of the study explains.

For some companies, these standards— “one-off accounting projects”—have driven a need for interim staff that brings specialized expertise a company doesn’t have internally. “This has created more opportunities for accounting and finance professionals to work in freelance and consulting positions, adding to the growing on demand economy,” it says.

Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , went into effect for public companies in 2018, and takes effect this year for private companies. The guidance replaces a large body of industry-specific rules with a principles-based, five-step model for how companies report earnings obtained from the goods they sell or services they provide. The standard was issued in 2014.

ASU No. 2016-02, Leases (Topic 842) , went into effect this year for public companies. The FASB plans to defer the rules from 2021 to 2022 for private companies. The guidance requires companies to record all long-term leased assets and leased liabilities on balance sheets, a major accounting change. The standard will enable investors to understand the magnitude of lease obligations companies carry, and the impacts on their overall operations.

In addition to revenue and leases guidance, the FASB issued new standards on credit losses, hedging and long-term insurance contracts, some of the biggest accounting changes the board has put into effect in more than a decade. The effective dates vary, by topic. The board plans to vote October 16 on whether to defer the standards for a subset of companies.

Turnover of Employees Can Cost Millions of Dollars

The study said the Bureau of Labor Statistics (BLS) predicts that the number of jobs for accountants, auditors and financial specialists to grow by 10 percent through 2026, faster than the average 7 percent growth rate for all occupations.

BLS on October 4 said the total U.S. unemployment rate fell to 3.5 percent in September, the lowest rate in 50 years. For the financial activities industry, the unemployment rate was even lower, only 3 percent last month.

“With unemployment low and job creation on the rise, there’s a shallower talent pool than most employers have dealt with in the past. To deal with the current talent shortage, business leaders need to focus on hiring the right talent and taking care of their existing staff,” the study says.

The report states that companies also need to take steps to retain the workforce they have because the average cost of replacing an employee comes at just over 20 percent of the individual’s salary. “So turnover can cost millions of dollars for some companies,” it says.

Executives, managers and hiring professionals might want to take the appropriate measures to take care of their current staff, “because the internal talent pool just might be a lot stronger than the one outside,” it states.

To do so, companies need to understand the top aspects of job benefits that employees value most, the study states. The top five are:

  • salary, pay and compensation;
  • traditional benefits such as health insurance and a 401(k);
  • opportunities for growth and development;
  • company culture;
  • alternative benefits such as remote work, flexible schedules, gym memberships and tuition reimbursement.

For in-depth analysis of the FASB’s revenue recognition standard, please see Catalyst: US GAAP — Revenue Recognition, also on Checkpoint.

For in-depth analysis of the FASB’s standard for lease accounting, please see Catalyst: US GAAP — Leases , also on Checkpoint.

 

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