FASB Reorganizes Its Future Priorities
Last September, the Financial Accounting Standards Advisory Council (FASAC), the primary advisory group of the Financial Accounting Standards Board (FASB), released the results of a survey that solicited stakeholder views about the standard-setting organization’s future project agenda.
At the time, FASB Chairman Russell Golden said the survey provided the FASB with important feedback on where it should focus its efforts – both now and in the future – to reduce complexity in US Generally Accepted Accounting Principles (GAAP) and improve the relevance of financial reporting for both public and private companies.
The FASB used the survey results as a guide for the reorganization of its agenda, which will target the issues that FASB stakeholders believe are top priorities, the board announced on January 29. In addition, the FASB discussed several research projects that will be included in its prioritization initiative.
“As our work on joint projects with the International Accounting Standards Board (IASB) comes to completion over the next year, the [FASB] will focus on improving US GAAP for our stakeholders here and abroad,” Golden said in a written statement. “Today’s agenda decisions will allow us to direct our resources to financial reporting issues our stakeholders believe are the most important.”
During Wednesday’s meeting, the FASB considered changes both to its own agenda and that of the Emerging Issues Task Force (EITF).
The FASB voted to add to its technical agenda a project to develop guidance for disclosure requirements related to government assistance, as well as to remove the following projects from its technical agenda:
- Emissions trading
- Earnings per share
- Income taxes (short-term convergence project)
- Not-for-profit financial reporting: other financial communications
- Investment property entities
- Investment companies: real estate property investments
The following projects were stricken from the EITF agenda:
- Application of the American Institute of CPAs (AICPA) Audit and Accounting Guide, Investment Companies, by real estate investment companies (EITF 09-D)
- Commodity inventories of brokers and dealers (EITF 06-12)
- Interpretation of constraining conditions of a transferee in a CBO structure (EITF 03-15)
- Multiple foreign exchange rates (EITF 10-B)
- Potential EITF issues on application of EITF 99-20 when a special-purpose entity holds equity securities
In consultation with the other board members, Golden decided the FASB would perform research on the following projects:
- Accounting issues in employee benefit plan financial statements
- Accounting for financial instruments: hedging [ranked second in the top-five FASB priorities, according to the FASAC survey]
- Accounting for financial instruments: liquidity and interest rate disclosures
- Conceptual framework [ranked third in the top-five FASB priorities, according to the FASAC survey]
- Financial statement presentation [tied with pensions for fifth in the top-five FASB priorities, according to the FASAC survey]
- Liabilities & equity: short-term improvements
- Pensions: cash balance plans
- Simplifications initiative
The FASB also decided that the Private Company Council (PCC) should consider doing pre-agenda work on phase two of the “Definition of a Nonpublic Entity” project.