Small Companies Face Difficult Implementation Process for Revenue Standard
Representatives from small public companies and their auditors told FASB on May 10 that the board’s wide-ranging new requirements for recognizing revenue have increased their costs, tied up resources, and caused them to work overtime explaining to investors and lenders why the top line in their income statements had changed. The meeting between FASB and members of its Small Business Advisory Committee was part of the standards setter’s recurring look at the cost and benefits of Accounting Standards Update (ASU) 2014-09, Revenue From Contracts With Customers (Topic 606). The requirements are a result of more than a dozen years of work on creating a consistent, principles-based approach for almost all industries worldwide to tally the top line in their income statements. The transition to the new revenue standard has not been all bad news: Some individuals on the panel said that all new standards have a learning curve, and they believed the worst part of implementing the new accounting was over.
Harold Monk Resigns After Serving 17 Months of Five-Year Term
FASB has announced that Harold Monk, who joined the board in 2017 and has represented private companies on the board, plans to step down by the end of the month for personal reasons. “My service on the FASB stands as a career highlight and a great source of pride,” Monk said. “I am grateful to my fellow board members and to the FASB staff for making my time in Norwalk so rewarding.” Monk’s resignation is effective as of May 31. FASB will operate with six members until the Financial Accounting Foundation (FAF), FASB’s parent organization of FASB, finds a replacement. “Harold expected to be able to serve his full five-year term, but, as announced, has decided to step down for personal reasons,” said Matthew Broder, FAF vice president for public affairs in an emailed statement. “We are respecting his wishes for privacy about his decision and appreciate his service to the FASB. We will soon begin the process of searching for his successor.”
Document Explains Recent Exposure Draft on Changes in Accounting Policies
On May 11, the IASB published a document to accompany the proposed ED 2018-1, which asks companies to consider the costs and benefits of changes in accounting policies that result from changes in the standards setting agenda. The document explains why the IASB is proposing its amended guidance and provides a summary of the accounting board’s due process. Companies and other organizations typically change an accounting policy when the change is required by IFRS or an amended standard, but ED 2018-1 says that some changes are voluntary in response to a decision by the IFRS Interpretations Committee when it provides material to explain the decision. Comments are due by July 27.