Implementation of Leases Standard Raises Questions
FASB has received several requests for clarifications to its lease accounting standard, and the board plans to review some of these by the end of the year. Concerns about the standard have ramped up as the effective date approaches and companies are unable to find commercially available software to help them follow the new recognition and measurement requirements and the disclosure rules. The board plans to consider modifications to the method companies must apply to make the transition to the standard, how landlords consider some collective maintenance charges in rent payments, and the disclosure rules about leases in a foreign currency and short-term lease expenses. “The board looks forward to considering if we should provide practical expedients around that,” FASB Chairman Russell Golden said.
Lobbying Effort Moves to Save Accounting Support Fee
The Financial Accounting Foundation (FAF), the parent organization of FASB and the GASB, is lobbying the Senate in an effort to save the accounting support fee that funds the GASB. In June, the House of Representatives passed the Financial Choice Act, a wide-ranging piece of legislation that rolls back much of the Dodd-Frank Act, including the support fee collected from broker-dealers who underwrite or trade in municipal securities by the Financial Industry Regulatory Authority (FINRA). The fee is used to fund much of the GASB’s operations. “We would not want to go back to those days,” FAF President Teresa Polley said during an October 13 meeting between FASB and a delegation from the Institute of Management Accountants. “We are continuing to execute a strategy down in D.C. so that people understand the importance of independent funding both for the FASB and the GASB,” Polley said.
Update to Business Combinations Standard Nears Completion
The IASB is close to agreeing to issue a final amendment to clarify the definition of a business. The board will vote on whether to finalize the amendment at its meeting on October 24-25. The IASB also is close to finalizing its Conceptual Framework, the guide that contains definitions of key financial reporting terms and concepts so that it can make consistent decisions when writing or amending standards. If the IASB wraps up its discussion, the board’s research staff expects to publish the final amendments in the first half of 2018.