FASB mulls future accounting projects as the post-convergence era of standards updates begins
The top U.S. accounting rule maker is looking for more input on what projects it should tackle over the next few years as it moves into the post-convergence era of accounting rulemaking.
The Financial Accounting Standards Board issued an "Invitation to Comment" to solicit feedback about potential financial accounting and reporting topics that FASB should consider adding to its agenda. "The invitation to comment is an important opportunity for stakeholders to help the FASB set its agenda for the next several years," FASB said in a statement.
FASB has recently put the finishing touches or is nearing the end of massive projects to update rules on such topics as revenue recognition, accounting for financial instruments, and accounting for share-based payments. One of the common themes of the large projects FASB has undertaken in the last ten years was a desire to nudge U.S. accounting rules closer to International Financial Reporting Standards (IFRS) administered by the International Accounting Standards Board.
Since the U.S. has largely abandoned plans to adopt IFRS for U.S. companies, there may be less pressure to select projects where there are large differences between U.S. rules and international rules. FASB has stated as a goal that it wants to eliminate some overlap in standards and may want to simplify some accounting where there are opportunities to do so.
"Now that many of the FASB's major projects are complete, we are considering other areas of financial reporting that stakeholders think we should improve," said Russell Golden, chairman of FASB. "But to develop the right solutions, we must first identify the right problems. And that means listening carefully to our stakeholders' experiences, input, and concerns."
Potential Focus Points
The Invitation to Comment covers financial reporting areas of concern identified by stakeholders in the recent survey of the FASB's advisory groups. The document includes potential issues and possible solutions about the following areas:
1. Intangible assets, including research and development
2. Pensions and other postretirement benefit plans
3. Distinguishing liabilities from equity, and
4. Reporting performance and cash flows, including income statement, segment reporting, other comprehensive income, and statement of cash flows.
"This invitation to comment gives our stakeholders the chance to identify potential issues we should consider, as well as how best to prioritize them," Golden added.
Specifically, the FASB is requesting feedback on the following:
1. Are the financial reporting issues described in this Invitation to Comment areas for which there is potential for significant improvement?
2. What is the priority of addressing each issue?
3. What approach should the FASB take to address each issue?
4. Are there other major areas of financial reporting not described in this Invitation to Comment that the FASB should consider adding to its agenda?
The board wants stakeholders to submit comments by October 17. FASB also says it plans to hold public roundtable meetings on the feedback during the fourth quarter of 2016.