Emerging Issues Task Force Divided on Guidance for Cloud Computing
During a July 20 meeting, FASB’s Emerging Issues Task Force (EITF) said its members needed more time and research before committing to a proposed accounting solution for costs and fees for setting up cloud-computing arrengements, which have become both common and costly. Members largely split into two camps, with one side saying the implementation costs associated with a cloud-computing arrangement that is considered a service contract should be recognized as an asset or expense when incurred. “The discussion is expanding considerably from where the project has focused,” FASB member Harold Monk said. “Does the task force believe that we should go forward dealing just with implementation costs, which was the original question, and consider whether we need to look at the other issues as a separate project? Because if we decide, ‘let’s look at the larger issues,’ that’s going to leave dealing with implementation costs still hanging.”
Proposal Calls for More Detailed Disclosures About Debts
The GASB is proposing that state and local governments provide more details about unused lines of credit, collateral pledged as security for loans, and other information about debt. “Stakeholders have expressed concerns related to the potential risks of debt, including bank loans, other forms of direct borrowings, and private placements of bonds that may affect a government’s credit profile,” GASB Chairman David Vaudt said in a statement. “The requirements of this proposed statement would improve financial reporting by providing users of financial statements with essential information that currently is not consistently provided. In addition, information about resources to liquidate debt and the risks associated with changes in terms associated with debt would be disclosed,” the proposal reads.
Senior SEC Staff Accountant Named Executive Technical Director
The IFRS Foundation has hired a deputy chief accountant at the SEC’s Division of Corporation Finance to become the IASB’s executive technical director, the foundation said on July 21. Nili Shah, who has served at the SEC since 2004, is scheduled to join the international accounting board’s staff in October. The foundation said she will coordinate the IASB’s technical activities. “Nili has been deeply involved in accounting standard-setting for almost two decades,” IASB Chairman Hans Hoogervorst said in a statement. “She brings a wealth of relevant technical and organizational experience to the IFRS Foundation and will play a key role in delivering the board’s work plan.” Shah replaces Hugh Shields, who left the IASB earlier this year after three years as technical director.
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