FASB Issues Update to its Conceptual Framework
The Financial Accounting Standards Board (“FASB”) continues to advance efforts to write consistent and effective disclosure rules in its standards. On August 28, the board published Concepts Statement (“CON”) No. 8, Conceptual Framework for Financial Reporting: Notes to the Financial Statements, which the FASB will use as a guide clarifying what information to consider when developing new disclosure requirements for future Accounting Standards Updates. Known as the “disclosure framework,” CON No. 8 will attempt to resolve a years-long debate over how much information should the board require from companies without them overloading financial statement footnotes with irrelevant details. The framework explains why. Read More.
FASB to Align Materiality Definition with Other Organizations
The Financial Accounting Standards Board (“FASB”) has finalized a two-part plan that involves returning to an older definition of “materiality.” At its March 21 meeting, the board agreed to use the materiality definition stated in Statement of Financial Accounting Concepts (“CON”) No. 2, Qualitative Characteristics of Accounting Information, and add an internal guide to its Concepts Statements to help produce consistent requirements for new U.S. GAAP disclosures. According to the FASB, the concept of materiality under CON No. 2 aligns with the Securities and Exchange Commission, the Public Company Accounting Oversight Board, and the American Institute of Certified Public Accountants. Also. Read More.
Topics: AICPA, American Institute of Certified Public Accountants "AICPA", FASB, Financial Accounting Standards Board "FASB", materiality, Notes to Financial Statements (Topic 235), PCAOB, Proposed Account, Public Company Accounting Oversight Board "PCAOB", Securities and Exchange Commission "SEC", Statements of Financial Accounting Concepts
FASB Drops Materiality Project
After two years of controversy, the Financial Accounting Standards Board (“FASB”) is scrapping plans to continue work on its proposal to amend the definition of materiality. The project, which commenced in September 2015, set out to align U.S. GAAP’s meaning of materiality with the legal interpretation regulators and courts use so companies can carefully decide their disclosures in financial statement footnotes. Work on the materiality amendments ended Wednesday, November 8. Board members did not expect to receive criticism for Proposed Accounting Standards Update No. 2015-310, Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material. Wall Street investors led the. Read More.
SEC Advisor Speaks on Materiality and Auditor’s Report
At a recent speech for management accountants at a conference in Tulsa, OK, Stephen Deane discussed mini-case studies on policymaking associated with materiality and the independent auditor’s report. Deane, an investment engagement advisor in the Securities and Exchange Commission’s (“SEC”) Office of the Investor Advocate, said that the mini-case studies offer insight into the policymaking process and the problems that policymakers face. The mini-case studies also distinguish between outside investors and managers inside the company. During his speech, Deane provided attendees a technical review of the Financial Accounting Standards Board’s attempts to establish materiality guidance and the Public Company Accounting. Read More.
Topics: Auditor's Report, FASB, Financial Accounting Standards Board "FASB", materiality, PCAOB, Public Company Accounting Oversight Board "PCAOB", SEC's Office of the Investor Advocate, Securities and Exchange Commission "SEC"
The ASBCA Issues Two CAS Decisions
By: John Ford , Senior Consultant, Government Contractor Services Group Recently, the Armed Services Board of Contract Appeals (“ASBCA” or “the Board”) issued two decisions relating to the Cost Accounting Standards (“CAS”) that should be of interest to contractors. In the first decision, Raytheon Company, Space and Airborne Systems, ASBCA No. 58608 (August 19, 2016), the Board decided that the contracting officer had abused her discretion by failing to consider all the factors listed in Federal Acquisition Regulation (“FAR”) 9903.305 in determining whether increased costs to the government resulting from an accounting practice change were material. As a large contractor doing billions. Read More.
Disclosure Framework Review Necessary before Finalizing Materiality Guidance
Before the Financial Accounting Standards Board (“FASB”) finalizes proposed changes to the materiality guidance, Russell Golden says the board must complete a thorough review of its disclosure framework project. Speaking recently at the Financial Accounting Foundation’s quarterly meeting, the FASB chairman told attendees that the standard setter plans to evaluate all phases of its project to update the disclosure requirements under U.S. generally accepted accounting principles (“U.S. GAAP”) by the end of the year. The review is expected to be finished by year’s end, with final changes to the materiality guidance scheduled for a 2017 release. In September, the FASB. Read More.