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What’s the Impact of FASB Framework and Standard Changes

Sep 4th 2018
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The FASB recently issued changes to its Conceptual Framework and Accounting Standard Updates regarding changes to disclosure requirements for fair value measurement and defined benefit plans.

According to the FASB, the Conceptual Framework – or Concepts Statements – is comprised of interrelated objectives and fundamentals. The objectives identify the goals and purposes of financial reporting and the fundamentals are the underlying concepts that help achieve those objectives. Those concepts provide guidance in selecting transactions, events and circumstances to be accounted for, how they should be recognized and measured, and how they should be summarized and reported.

No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement, improves the disclosure requirements on fair value measurements in Topic 820, effective for all organizations for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2019. Early adoption is permitted.

No. 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General Topic (715-20): Disclosure Framework – Changes to the Disclosure Requirements for defined benefit plans improves disclosure requirements for employers who sponsor defined benefit pension or other post-retirement plans. The amendments are effective for fiscal years ending after Dec. 15, 2020 for public companies, and for fiscal years after Dec. 15, 2021, for all other organizations. Early adoption is permitted.

“The two changes to our Conceptual Framework will help the board identify and evaluate disclosure requirements in accounting standards and clarify the concept of materiality,” said FASB chairman Russell G. Golden, in a prepared statement. “Meanwhile, the new standards improve fair value and defined benefit disclosure requirements by removing disclosures that are not cost beneficial, clarifying disclosures’ specific requirements, and adding relevant disclosure requirements.”

According to a press release issued by the FASB, the updates relate to a new chapter and an update to an existing chapter, as follows.

  • A new chapter in the conceptual framework on disclosures explains what information the FASB should consider in notes to financial statements by describing the purpose of the notes, the nature of appropriate content and general limitations. It also addresses the board’s considerations specific to interim reporting disclosure requirements.
  • An update to an existing chapter of the conceptual framework for its definition of materiality aligns the FASB’s definition of materiality with other definitions in the financial reporting system. The materiality concepts will now be consistent with the definition of materiality used by the Securities and Exchange Commission, the auditing standards of the Public Company Accounting Oversight Board and the American Institute of CPAs, and the U.S. judicial system.

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By ultimatetacs
Jan 30th 2019 08:42 EST

Good to know what is impact of fasb framework and put good information about that.
An also what standards are changes that mention in this post.

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