FASB News
Debt Classification Guidance Moves Closer to Final Status
FASB plans to settle some of the lingering issues with its upcoming guidance for classifying debt before publishing the guidance later this year. The board is working on guidance that is expected to require businesses to more clearly distinguish between debts they must pay right away versus those they have more time to settle. “We have one sweep issue to finalize; we’re very, very close to finishing,” FASB member Christine Botosan said on August 6 at the American Accounting Association’s annual meeting in National Harbor, Maryland. The planned update is expected to erase the current rules-based, contract-specific guidance in U.S. GAAP with a broad principle for determining how to classify a debt as current or noncurrent.
IASB News
Conceptual Framework Aids Efforts to Promote Sound Financial Reporting
In a speech at the University of Western Australia on August 9, IASB member Ann Tarca said that the board’s Conceptual Framework for Financial Reporting provides a reliable approach to measuring profitability and an entity’s financial condition. Tarca said the framework’s new chapter on measurement is not biased in favor of any one approach, such as fair value, but instead promotes the idea of selecting a measurement basis that does the best job of reliably presenting an entity’s earnings and financial condition. “The Conceptual Framework is clear that the Statement of Financial Position and the Statement of Financial Performance are of equal importance,” Tarca said, according to the text of her speech. “It explicitly states that information about income and expenses is just as important as information about assets and liabilities.” Tarca’s speech addressed a lingering debate in the accounting profession about the usefulness of financial reporting in the capital markets.
AICPA News
Proposed Valuation Certification Framework Released for Comment
The AICPA has proposed a framework for accountants seeking a professional certification for the valuation of financial instruments. The proposed framework would provide guidance about the amount of documentation and proof accountants will have to obtain when valuing a financial instrument or reviewing the work of another professional who performed the valuation. The AICPA said that it hopes the framework will help establish more confidence among financial market participants in the valuation of financial instruments. In order to earn the credential for certifying financial instruments, accountants will have to follow the framework and continue satisfying the related requirements, the AICPA said.
