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FASB Moves Forward with Simplifying Debt Classification Guidance

At its September 13 meeting, the Financial Accounting Standards Board (“FASB”) wrapped up talks on the Proposed Accounting Standards Update, Debt (Topic 470): Simplifying the Classification of Debt in a Classified Balance Sheet (Current versus Noncurrent). As part of the discussion, the FASB reached the decisions on the following topics: Classification Principle: Debt and other instruments that are part of the final Accounting Standards Update must be categorized as noncurrent liabilities in a classified balance sheet if: The liability is contractually due to be settled over one year (or operating cycle, if longer) after the balance sheet date; or The. Read More.

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FASB Still Working to Address Disclosure Overload in Financial Statement Footnotes

Since 2014, the Financial Accounting Standards Board (“FASB”) has been working to simplify U.S. GAAP disclosure requirements for financial statement footnotes. The project, which was released under Proposed Statement of Financial Accounting Concepts No. 2014-200, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements, aimed to avoid writing rules that would lengthen a company’s financial statements without benefiting investors. Despite its efforts, the FASB has received frequent complaints from companies who were frustrated over the various disclosure requirements. Board representatives are also concerned about what they consider disclosure overload. They believed investors were becoming overwhelmed with additional information that. Read More.

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FASB to Review Guidance on Credit Card Receivables in October

The Financial Accounting Standards Board (“FASB”) plans to address concerns over its credit loss standard. Particularly, the FASB may attempt to clarify guidance for banks estimating the life of instruments such as credit card receivables without a specific payoff date. Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, requires banks to disclose their losses on loans, certain debt securities and receivables. Financial professionals, however, haven’t reached a consensus on how to apply some of the requirements to credit card receivables. The standard calls for lenders to estimate the losses. Read More.

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FASB to Delay Amended Income Tax Guidance

The Financial Accounting Standards Board (“FASB”) is taking a wait-and-see approach before finalizing its income tax disclosure guidance. An FASB spokesperson said the board wants to await the outcome of Congress and the Trump administration’s income tax reform legislation prior to approving Proposed Accounting Standards Update No. 2016-270, Income Taxes (Topic 740): Disclosure Framework — Changes to the Disclosure Requirements for Income Taxes. The move is to ensure the FASB’s proposed amendments to income tax disclosures stay relevant. The FASB also plans to hold off on making additional changes to the guidance under Topic 740, Income Taxes. The FASB spokesperson. Read More.

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FASB Makes Decisions on Conceptual Framework and Codification Projects

At its August 30 board meeting, the Financial Accounting Standards Board (“FASB”) reached decisions on two ongoing projects. The first project covered was the conceptual framework project, in which the FASB agreed to remove the terms “probable”, “future economic benefits”, “sacrifices of economic benefits”, and “past transactions or events” from its revised definitions of an asset and a liability. Staff members were ordered to continue reviewing whether “control” is needed in the FASB’s definition of an asset. The FASB then discussed its project to improve the Accounting Standards Codification (“Codification”). Talks involved a staff analysis of the proposed changes and. Read More.

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FASB Reconfirms Lease Standard’s Effective Date

While some companies continue to struggle with the implementation of Accounting Standards Update No. 2016-02, Leases (Topic 842), the Financial Accounting Standards Board (“FASB”) has no plans to postpone the standard’s 2019 effective date for public businesses. On August 29, an FASB spokesperson said that the board would not consider a request to give companies more time to comply with the lease accounting standard. The spokesperson also remarked that there are no plans to delay the standard’s effective date. As mentioned in our August 11 blog , the American Petroleum Institute (“API”) asked the FASB to delay the standard by two years. The. Read More.

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