The Financial Accounting Standards Board has released for public review and comment its proposed 2015 GAAP Financial Reporting Taxonomy.
The draft 2015 Taxonomy contains updates for accounting standards that have been adopted by FASB since the 2014 release, plus other improvements that have been recommended throughout the past year. Companies use the Taxonomy to tag financial statements elements in XBRL, the interactive filing system through which public companies submit their quarterly and annual financial statement data to the Securities and Exchange Commission. The draft Taxonomy is open for review and public comment through Oct. 31.
FASB has issued 15 separate Accounting Standards Updates in 2014, most notably a comprehensive new standard for how to recognize revenue. That new standard is not contained in the 2015 Taxonomy draft, however, because it is not effective until 2017. FASB has said it plans to include the new revenue standard in the August 2015 draft Taxonomy to give companies an extra year to study the elements and provide any feedback on possible revisions.
Also not included in the 2015 draft is the most recent standard issued by FASB, ASU 2014-15 requiring new disclosures meant to give investors earlier warning of when there’s doubt about a company’s ability to remain a going concern. FASB says it is not incorporated into the 2015 draft due to time constraints, but it is provided in full detail as an appendix. FASB says it will be incorporated into the 2015 draft release of the 2015 Taxonomy. The going concern standard does not take effect until 2016, although early adoption is permitted so some companies may need those elements sooner than others.
In a summary of the major changes from the 2014 to the 2015 Taxonomy, FASB says the latest draft contains “substantially fewer” changes than in prior years. In terms of changes to reflect recently adopted accounting standards, the new Taxonomy contains new elements around equity method investments, trouble debt restructurings, service concession arrangements, technical corrections and improvements, discontinued operations, development stage entities, repurchase-to-maturity transactions, stock compensation, consolidation. The Taxonomy does not reflect standards adopted by FASB that affect only private companies.
Beyond changes to reflect new accounting standards, FASB also made some industry-specific changes of concern to the financial services and insurance sectors, and added new elements related to accumulated other comprehensive income, equity, and deferred taxes. FASB also removed 126 elements for various reasons, such as infrequent use in practice, changes in GAAP, or because they shouldn’t have been created in the first place.