FASB Issues ASU 'Technical Corrections and Improvements'

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."
 
Effective Date
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.
 
Related article:
 

You may like these other stories...

Koskinen warns filing season could be most complicated yetImplementation of the Foreign Account Tax Compliance Act and the Affordable Care Act, combined with a tight budget and the possibility of Congress passing a late...
Curious as to what the fastest-growing accounting and finance jobs might be for the next several years? According to the new 2015 Salary Guide from staffing firm Accounting Principles, some of those jobs include bookkeeping...
Read more from Larry Perry here and in the Today's World of Audits archive.The first part discussed the principles of revenue recognition under the FRF for SMEs. This part will focus on auditing issues, including some...

Already a member? log in here.

Upcoming CPE Webinars

Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.