FASB Issues ASU 'Technical Corrections and Improvements'
by Terri Eyden on
By Anne Rosivach
The Financial Accounting Standards Board (FASB) has issued amendments to the FASB Accounting Standards Codification® based on feedback from stakeholders. The amendments, issued as Accounting Standards Update, Technical Corrections and Improvements (ASU No. 2012-04), are the product of a standing FASB project, which was added to the board's agenda in 2012 by then acting FASB Chairman Leslie Seidman.
The project is designed to facilitate Codification updates for technical corrections, clarifications, and improvements, and to eliminate the need for periodic agenda requests for narrow and incremental items.
Since the Codification was established in September 2009, constituents have generated feedback on minor corrections and clarifications using the Codification Research System's feedback mechanism. Changes to the Codification are communicated through an ASU.
Conforming Amendments in ASU No. 2012-04
The October 2012 update includes more substantive, limited-scope improvements. These are items that represent narrow and incremental improvements to US GAAP and are not purely technical corrections. The update contains conforming amendments to the Codification to reflect the measurement and disclosure requirements of Topic 820, Fair Value Measurement, that identify when the use of "fair value" should be linked to the definition of fair value in Topic 820.
The amendments included in the update are generally non-substantive in nature. The update states:
"The amendments in this Update represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, the amendments will make the Codification easier to understand and the fair value measurement guidance easier to apply by eliminating inconsistencies and providing needed clarifications."
The amendments in ASU No. 2012-04 that will not have transition guidance will be effective upon issuance.
Amendments may result in changes to existing practice. Transition guidance has been provided for certain amendments which the Board deemed to be more substantive and the effective date will be delayed.
For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013.
Changes to US GAAP
The update is not intended to significantly change US GAAP. The amendments are not expected to create any new differences between US GAAP and IFRS.
- FASB Says Proposed 'Technical Corrections' to Code Not Pervasive, But May Result in Changes to Practice
Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
2 weeks 5 days ago by claudilocks