FASB to Update Definitions for Key Accounting Concepts
At its May 3 meeting, the Financial Accounting Standards Board (“FASB”) voted to expand efforts to update its Conceptual Framework. The decision impacts potential updates to Concepts Statement (“CON”) No. 6, Elements of Financial Statements, which provides definitions for key financial reporting concepts like assets, liabilities, and revenues. Board members also agreed to preserve the goal of financial reporting as mentioned in CON No. 8, Conceptual Framework for Financial Reporting—Chapter 1, the Objective of General Purpose Financial Reporting. Viewed as the main characteristic of the Conceptual Framework, the chapter says that a financial reporting’s objective is to offer useful financial. Read More.
SEC Chief Accountant Pushes for IFRS Use
Fresh off his formal succession to Securities and Exchange Commission (“SEC”) Chief Accountant, Wesley Bricker wants the market regulator to resume consideration of International Financial Reporting Standards (“IFRS”). At a December 5 conference in Washington, D.C., Bricker said he believes the SEC should consider a proposal that would allow U.S. companies to supplement GAAP financial statements with IFRS information. James Schnurr, Bricker’s predecessor, had originally introduced the proposal prior to leaving the SEC. No immediate changes are expected due to the SEC’s slow regulatory process and the limited progress made in the U.S. market’s application of international standards. In addition, the SEC is currently dealing with an influx of leadership changes, with. Read More.
Topics: Financial Accounting Standards Board "FASB", Financial Statements, GAAP, International Accounting Standards Board "IASB", International Financial Reporting Standards "IFRS", Securities and Exchange Commission "SEC"
Feedback Leads to Uncertainty of FASB’s Standard-Setting Priorities
Opposing views have complicated the Financial Accounting Standards Board’s (“FASB”) prioritization of future standard-setting projects. During a December 16 public roundtable on the FASB’s Invitation to Comment, Agenda Consultation, several financial professionals asked the board to end confusion on the difference between an asset and liability. Some participants suggested the FASB focus on overhauling income and cash flow statements, while others pushed for a project on accounting for intangible assets. Out of the many projects discussed, clarifying differences between liabilities and equity and amending financial statement performance drew the most support from roundtable participants. A Big Four partner told the. Read More.
GASB Appoints 2016 Academic Fellow
The Governmental Accounting Standards Board (“GASB”) has announced the appointment of Dr. William Baber to its Academic Fellow for 2016. Dr. Baber is a professor at Georgetown University’s McDonough School of Business, and has over 30 years of experience teaching financial and managerial accounting at various colleges and universities. Prior to his academic career, he was an auditor and consultant with a national accounting firm in Washington, D.C. Regarding Dr. Baber’s appointment, Cherry Bekaert Senior Audit Manager Melisa Galasso remarked, “I am excited to see Professor Baber’s passion for the accounting industry acknowledged with this appointment. As a former colleague, I know. Read More.
Materiality Proposal Receives Praise and Criticism
Comment letters on the Financial Accounting Standards Board’s (“FASB”) materiality proposal reveal mixed sentiment among companies, investors and consumer groups. Proposed Accounting Standards Update No. 2015-310, Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material, would establish materiality as a legal concept to help companies determine what information to include in their financial statement footnotes. Numerous companies have voiced their support of the plan. Comcast Corp., for instance, said the proposed clarification to the definition of materiality would be consistent with the FASB’s efforts of making disclosures more useful for investors. Another supporter, Financial Executives International, commented that. Read More.
PCC Slams Income Tax Disclosure Plan
At its December 4th meeting, the Private Company Council (“PCC”) criticized the Financial Accounting Standards Board’s (“FASB”) proposal to add effective disclosures to Accounting Standards Codification 740-10-50, Income Taxes. The plan would require additional details about income taxes to be disclosed in the footnotes of a company’s financial statements. Members of the FASB’s advisory group, however, said that the extra details would be a burden on private companies and worthless to most financial statement users. In particular, PCC members slammed the requirement for companies to disclose the reconciliation of its effective tax rate and statutory rate. While U.S. GAAP requires public companies to. Read More.