FASB News
Conceptual Framework Discussion to Resume
FASB resumed discussions on its effort to complete its Conceptual Framework—an internal guide to help the board set consistent accounting standards—at its May 3 meeting. The FASB’s Conceptual Framework is a document that is supposed to help the board write consistent accounting standards by defining key terms and laying out guidelines for making measurement and presentation decisions. The board’s current framework is considered incomplete and has been a work-in-progress for several years. The chapter on measurement, Concepts Statement 5, Recognition and Measurement in Financial Statements of Business Enterprises, is considered especially sparse. The guidance “is of no help to the board in establishing measurement requirements” and “may be the single most significant gap in the FASB’s existing framework,” FASB staff accountants wrote in a memo for a joint board meeting between the FASB and IASB in September 2015.
IASB News
Hoogervorst Remains Cautious about Sustainability
The IASB has started researching what it may do to help promote consistency for the environmental, sustainability, and governance (ESG) information that companies report. Speaking at an April 26 event sponsored by the International Integrated Reporting Council (IIRC) in New York, IASB Chairman Hans Hoogervorst described his board’s preliminary research on sustainability information. He emphasized that the IASB has no plans to issue a mandatory reporting requirement, and that the board is proceeding cautiously. “We have a history of biting off more than we can chew, so we are being very careful about adding anything to our work plan,” Hoogervorst said. The reports that companies have provided about environmental and social issues to date follow no consistent format. While it has not decided how to approach the issue, the IASB believes it is qualified to provide some much-needed consistency for an area of reporting that is a long way from maturing.
AICPA News
Cybersecurity Risk Management Reporting Framework Released
The AICPA’s Assurance Services Executive Committee (ASEC) released a reporting framework for managing cybersecurity risks. The framework includes criteria for describing a company’s risk management practices and guidance for CPAs to use when evaluating a client’s cybersecurity. The amended framework aligns the ASEC’s guidance with the Internal Control—Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the AICPA said. It also updates the trust services guidance to better address computer risks, and other changes that are meant to make the guidance easier to apply. “The framework we have developed will serve as a critical step to enabling a consistent, market-based mechanism for companies worldwide to explain how they’re managing cybersecurity risk,” said Susan Coffey, the AICPA’s executive vice president for public practice. “We believe investors, boards, audit committees and business partners will see tremendous value in gaining a better understanding of organizations’ cybersecurity risk management efforts.”
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