FASB Moves Forward on Projects without IASB
Unable to agree with the International Accounting Standards Board (“IASB”), the Financial Accounting Standards Board (“FASB”) plans to move forward independently on two projects. As part of its meeting agenda this week, the FASB will address the projects by focusing on making smaller improvements to U.S. GAAP rather than entire rewrites.
For its project on accounting for insurance liabilities, the upcoming meeting will pick up from the FASB’s April discussion when the decision was made to improve disclosures regarding the liabilities agreed upon by property-and-casualty insurance companies. The FASB has indicated disclosures could require information such as losses, claim reserves, claims estimates, and if a company deducts the liability for unpaid claims and claim adjustment expenses.
Also part of the meeting’s agenda, the FASB will cover presentation and disclosure issues concerning financial instruments. Originally a response to the 2008 financial crisis, the proposed financial instruments classification and measurement amendments were the boards’ effort to create simplified guidance for financial products. Each board had attempted merging similar proposals, FASB’s Accounting Standards Update No. 2013-220, Financial Instruments—Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, and the IASB’s Exposure Draft No. 2012-4, Classification and Measurement: Limited Amendments to IFRS 9 (Proposed amendments to IFRS 9-2010). However, talks between both sides fell through, and the FASB doubted a joint model would likely improve U.S. GAAP.
To further discuss the two projects and their potential impact on companies’ financial reports, the FASB is expected to meet with Financial Executives International’s Committee on Corporate Reporting representatives. The meeting, held in Stamford, Connecticut, will occur following the FASB’s weekly meeting.