Revised Proposal on Income Tax Disclosure Rules Issued
On March 25, FASB issued a revised proposal to amend the disclosure rules under income tax accounting so that financial statement users can receive more relevant information about those items. The revised exposure draft reflects changes introduced by the Tax Cuts and Jobs Act of 2017. The proposal would remove disclosures that no longer are considered cost beneficial or relevant and add more detailed disclosure requirements identified as relevant. For example, companies would have to disclose income or loss from continuing operations before income tax expense or benefit and before intra-entity eliminations, disaggregated between domestic and foreign. They would also have to provide information about income tax expense or benefit from continuing operations, disaggregated between federal, state, and foreign. Moreover, companies would need to disclose income taxes paid disaggregated between federal, state, and foreign. The board is seeking comments on the proposal by May 31.
Nominations Sought for FAF Board, FASAC, PCC
The Financial Accounting Foundation (FAF), the body with oversight for FASB and the GASB, has launched a search for candidates to help with the oversight and process of accounting standards setting. The organization, currently at 18 members, is seeking to fill upcoming vacancies on its board with senior leaders in the investment profession, the FAF said on March 18. New trustees would serve five-year terms that would begin on January 1, 2020; nominations are due by April 19. Advisory seats have also opened for the chairman role of the Financial Accounting Standards Advisory Council (FASAC) and members of the Private Company Council (PCC), the announcement states. The FASAC is FASB’s main body of advisers on issues related to projects on its agenda, possible new agenda items, project priorities, and procedural matters. There are currently 34 FASAC members, appointed for a one-year term and eligible to be reappointed for three additional one-year terms. Nominees should be senior finance or accounting executives, such as a controller, chief accounting officer, chief financial officer, or a senior leader in the audit profession with experience working and interacting with public or private company boards of directors, the FAF said.
Accounting for High Inflationary Economies to be Discussed by FASAC
The Financial Accounting Standards Advisory Council (FASAC), FASB’s main body of advisers, will hold discussions at its upcoming meeting on March 29 about issues that could emerge in the accounting for high inflationary economies. The topic is being raised during a time of increased foreign exchange rate volatility, with some countries holding multiple exchange rates and experiencing high inflation. FASB does not currently have a project on its agenda to tackle the topic of high inflationary economies. The existing GAAP standards on the subject are found under Topic 830, “Foreign Currency Matters,” which was first issued in 1981. It provides a model for reporting when an entity conducts transactions in more than one currency.