As it wraps up some major projects in the coming months and pushes through some simplification initiatives, the Financial Accounting Standards Board is starting to wonder: what’s next?
FASB plans to publish a discussion paper looking for input on what comprehensive accounting standard revisions the board should add to its technical agenda. FASB Chairman Russ Golden wrote recently that the board is looking to sink its teeth into something big.
“Now that some of our projects are winding down and good progress is being made on our narrow-focus simplification projects, the FASB is determining whether there are big ticket issues we should tackle, and if so, when we should address them,” Golden wrote.
FASB is working on some clarifications and simplifications to its comprehensive new standard on revenue recognition that are expected to be completed by the end of the year. The board also is expected to finish up its equally huge efforts on leasing and on impairment, classification, and measurement of financial instruments by the end of 2015.
After those projects are complete, big projects remaining on FASB’s agenda include hedging of financial instruments, accounting for long-duration insurance contracts, and the disclosure framework. The board also has a number of narrow-scope projects, some of them focused on simplification, that are expected to be complete by the end of 2015. Those will touch on income taxes, business combinations, employee benefit plans, share-based payments, gift cards, and other technical corrections and improvements.
So that leave FASB with some bandwidth heading into 2016. Golden says the board is open to considering issues that are comprehensive, meaning they will impact multiple industries across public and private companies as well as not-for-profit organizations. The consideration coincides with a similar agenda review at FASB’s international counterpart, the International Accounting Standards Board, creating an opportunity for collaboration, he says.
“A first step in identifying the right issues is asking our stakeholders what they think,” Golden wrote. “We must determine which issues are the most critical and whether they can, in fact, be addressed through standard-setting.”
As part of the process to develop the discussion paper, FASB will consider the results of an upcoming survey that will be performed by the Financial Accounting Standards Advisory Committee. In addition to specific questions, the survey will also ask respondents to answer more open-ended questions around what are the most needed financial reporting improvements, what are the problems and feasible alternatives, and how urgent is the solution. The survey results are expected in late September.