Disclosure Framework Project Nears Completion
At its March 21 meeting, FASB weighed the external comments on the draft of the final version of its Concepts Statement for U.S. GAAP’s disclosure rules. The board last discussed its Disclosure Framework in November 2017, when it put the finishing touches on the plan. The board’s goal is to develop an outline for the procedures it should follow and questions it should ask when developing a new requirement for financial statement footnote disclosures. The proposal attempted to draw a line between information that is appropriate for financial statement disclosures versus information that should be excluded. Many businesses and auditors, for example, fret when the FASB calls for details that require looking to the future or making estimates that are difficult to verify and audit.
Government Assistance Disclosure Project to Reopen Debate about Tax Breaks
The FASB plans to revisit a prior debate at its March 21 meeting about a proposal that would require businesses to reveal information about tax incentives and abatements that government bodies offer to encourage companies to relocate to their cities or counties or expand the local workforce. In June 2016, the board had decided companies only had to reveal the existence of but not the amount of these breaks. FASB member Harold Monk, who joined the board in January 2017, questioned why the board decided to forgo disclosure of the tax abatement information when property tax abatements and other types of incentives are so prevalent. “That is probably the most common local government type of assistance that is provided, and I think that would be something significant for local property owners to be able to identify or understand,” Monk said. FASB Chairman Russell Golden said the board will hold a vote on the matter after their discussion.
Japanese Standard-Setters to Offer Insight on Digital Currency Accounting
While members of the IASB have expressed caution about developing rules on accounting for digital currencies such as bitcoin, it appears open to hearing suggestions, the agenda for the next meeting of its main advisory panel suggests. Members of the Accounting Standards Board of Japan (ASBJ) plan to make a presentation to the Accounting Standards Advisory Forum (ASAF) when it meets April 16 and 17 on the Japanese standard-setter’s new accounting guidance for digital currencies. Under the accounting guidance, virtual currencies are considered assets for accounting purposes “because they may contribute to cash inflows to the entity through sales or conversions to cash,” according to the presentation the board plans to make at the ASAF meeting. But they are a “new independent category of assets” and do not fit into any existing asset categories such as foreign currencies, inventories held for trading, or intangible assets. “After considering the potential categories of assets, the ASBJ concluded that there is no category of assets that would be appropriate for virtual currencies. Accordingly, the ASBJ decided to prescribe that virtual currencies were an independent category of assets,” the presentation says.