Proposal Would Offer Transition Relief for Credit Losses Standard
On February 6, FASB issued a proposal intended to offer transition relief to businesses following the board’s new credit losses standard for the first time. The proposal would allow businesses electing the fair value measurement option for newly originated or purchased loans to also measure their existing loans at fair value at transition. “This would increase the comparability of financial statement information provided by institutions that otherwise would have reported similar financial instruments using different measurement methodologies, potentially decreasing costs for financial statement preparers while providing more useful information to investors and other users,” a FASB spokesperson said. Comments are due March 8.
ASB to Align Materiality Definition with FASB, SEC, PCAOB
The AICPA’s Auditing Standards Board (ASB) has approved a project to align its definition of materiality with that used by other regulators and standards setters in the United States. The ASB’s effort to eliminate inconsistencies in the definition of materiality dates back to its original definition, which had been in effect from 1980 until 2010. The primary difference in the definition is related to the notion of “would influence” versus “could influence.” The AICPA, the IASB, and the IAASB use “could influence” in their standards. In 2011, the AICPA’s ASB adopted almost verbatim the IAASB’s definition when it converged its standards with guidance published by the international standards setter, according to a discussion paper. “Now that FASB and everyone else in the U.S. uses ‘would,’ the ASB has agreed that it is more appropriate for us to be consistent with everyone else in the U.S. because that’s our national jurisdiction,” said Ahava Goldman, associate director of audit and attest standards at the AICPA.
Zietsman to Start as Chief Auditor
The PCAOB’s new chief auditor, Megan Zietsman, will assume her position on February 25, according to board spokeswoman Torrie Matous. In mid–December 2018, the board named Zietsman to lead the professional standards office; at the time, she was deputy chair of the International Auditing and Assurance Standards Board (IAASB) and a partner in Deloitte & Touche LLP’s professional practice network in the United States. The appointment follows the departure of then–chief auditor Martin Baumann in May 20018, following a complete turnover of PCAOB members early in the year. PCAOB Deputy Chief Auditor Barbara Vanich will continue to serve as acting chief Auditor until Zietsman assumes her position.