FASB

Proposed ASU to amend Codification's Master Glossary

The Board is asking for comments on proposed modifications to the Master Glossary included in the FASB Accounting Standards Codification® (ASC).

The amendments in proposed Accounting Standards Update (ASU), Technical Corrections and Improvements Related to Glossary Terms, would essentially delete outdated terms; correct existing or insert missing links; address situations where the same term is used to convey similar, but not identical, meanings by changing the term used; provide additional clarification; and correct for unintended applications. The proposed changes are not expected to impact current accounting practices.

Comments on the proposed ASU are due by August 5.

Highlights of May 1 meeting posted

All decisions reached at Board meetings are tentative and may be changed at future meetings. Decisions are included in an Exposure Draft only after a formal written ballot. Decisions reflected in Exposure Drafts are often changed in redeliberations by the Board based on information received in comment letters, at public roundtable discussions, and from other sources. Board decisions become final after a formal written ballot to issue a final Accounting Standards Update.

During its May 1, Board members primarily focused on three topics: new agenda items for the EITF, a new ongoing Private Company Council project for the Board, and a Discussion Paper that will be issued on not-for-profit financial communications. These topics are briefly summarized below (with the exception of the EITF agenda items, which were addressed in the May 7, 2013 On the Horizon).

Private Company Council project

The Board added to its own agenda a standing project related to Private Company Council activities with a dual objective:

  • To monitor and consider both proposed and final guidance issued by the Council for private companies
  • To consider if any proposed or final guidance issued by the Council is appropriate for public companies, not-for-profit organizations, or employee benefit plans

Not-for-profit financial communications

After discussing research on other financial communication frameworks, Board members decided to issue a Discussion Paper to elicit feedback from not-for-profit organizations about their financial communications. The Board believes that this input will help to decide whether to add a project on not-for-profit financial communications to its agenda.

The Board expects to issue the Discussion Paper in the fourth quarter of 2013, which would coincide with the release of the exposure draft on its not-for-profit financial statements project.

First U.S. GAAP alternatives for private companies proposed

In only its third public meeting, the Private Company Council on May 7 proposed exposing the following alternative guidance to U.S. GAAP for private companies:

  • Offering relief from the requirement to separately recognize certain intangible assets that are acquired in business combinations
  • Allowing amortization of goodwill and use of a simplified goodwill impairment model
  • Allowing adoption of simpler approaches to account for certain types of interest rate swaps if a company intends to economically convert the interest rate on its debt

This move by the Council represents the first step toward the endorsement of alternative guidance for private companies. The proposal must be endorsed by a simple majority of FASB members before it is exposed for public comment.

Council seeks feedback from stakeholders on future Board projects

The FASB's primary advisory group, the Financial Accounting Standards Advisory Council (FASAC), has released a survey to solicit input from constituents on the Board's upcoming agenda, including the priority of future projects. The survey features open-ended questions so that respondents can elaborate on specific projects they feel are most significant.

Comments are due by May 30.

Webcast on nonpublic entities scheduled for June 5

The Board will present a webcast on June 5 from 1:00 to 2:40 p.m. (EDT) to discuss the status of its standard-setting activities related to private and not-for-profit entities. The webcast will include an update of the Private Company Council's activities.

AICPA updates guide on state and local governments and issues alert on employee benefit plans

The AICPA has updated its Audit and Accounting Guide, State and Local Governments, which now conforms with the new guidance from clarified auditing standards issued by the Auditing Standards Board (ASB). The updated version includes revised audit report illustrations, new guidance on state and local government group audits, revised guidance specific to the special purpose frameworks, and guidance for municipal securities filings, as well as recent GASB pronouncements.

The AICPA has also issued an Audit Risk Alert, Employee Benefit Plans Industry Developments, to address emerging issues on employee benefit plan audits, including fair value measurements, reconsideration of effective control for repurchase agreements, specifics on defined benefit pension plans, and regulatory updates.

PCAOB re-proposes standard on related parties

The PCAOB has re-exposed for public comment the proposed Auditing Standard, Related Parties, together with related amendments to existing standards.

Revisions were made in response to comments generated when the Board initially exposed the proposal in 2012. The proposal is expected to improve how auditors examine and evaluate related-party transactions, particularly how a company identifies, accounts for, and discloses related-party activities.

Comments on the re-exposed proposed standard and amendments are due by July 8.

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