FASB News
Banks Pressure Federal Regulators for Changes to Credit Losses Standard
On October 17, a trade group representing large U.S. banks requested that financial regulators delay the biggest change to bank accounting in decades. The Bank Policy Institute wrote about its concerns to the Financial Stability Oversight Council (FSOC), a panel created by the Dodd-Frank Act and chaired by Treasury Secretary Steven Mnuchin that monitors financial stability. The trade group said FASB’s Accounting Standard Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, would magnify bank losses during an economic downturn, which could curtail lending and hurt bank earnings. FASB said it planned to respond to the letter, but made no commitment to act on the bankers’ recommendations. “Since issuing the credit losses standard in 2016, the FASB has continued to meet regularly with banking institutions and banking regulators alike. We will continue to work with these organizations to ensure a smooth and effective implementation of the standard, and stand ready to answer any questions as they arise,” a FASB spokesperson said.
PCAOB News
Senior Positions to Be Filled by Year-End
PCAOB Chairman William Duhnke expects to fill the vacant posts at the head of the regulatory board’s various offices before the end of the year. “I can’t give you a specific date, but our goal is by the end of the year to have all our senior positions filled,” Duhnke said at the Accountants’ Liability 2018 conference hosted by the American Law Institute in Washington on October 18. Duhnke said the board recently started the process of naming division heads when George Botic was named the director of the Division of Registration and Inspections, filling the position left vacant after Helen Munter left in May. After a wholesale change of the PCAOB’s board members in early 2018, the directors of its major divisions and offices left by the end of May. The departing officials included Martin Baumann, the chief auditor; Claudius Modesti, the enforcement chief; Gordon Seymour, the general counsel; and Nirav Kapadia, the chief information officer.
GASB News
Webinar to Examine Plan to Update Government Financial Reporting Model
GASB said it plans to hold a November 7 webinar to explain two documents it published recently to gather public opinions about its long-range plan to update the financial reporting model for state and local governments. The accounting board wants comments submitted for Preliminary Views (PV) 3-25, “Financial Reporting Model Improvements,” and PV 3-20, “Recognition of Elements of Financial Statements,” by February 15, 2019. PV 3-25 presents the GASB’s thinking on targeted improvements to the financial reporting model for annual financial reports from state and local governments. The board is considering changes that are designed to improve the model’s effectiveness in providing information for decision making and assessing a government’s accountability; these include a short-term focus on the measurement of financial resources for government funds that recognizes short-term transactions and other events when they are incurred and long-term transactions and other events when they become due. PV 3-20 addresses the concepts related to recognition of assets and liabilities and other elements of financial statements. GASB said the event will include a question-and-answer session with the board’s staff.
