Noski Reappointed Chairman of Financial Accounting Foundation
Former senior banking executive Charles Noski has been reappointed to an additional term as chairman of the Financial Accounting Foundation (FAF), the body with oversight of FASB and the GASB. Earlier this year, Noski said he would not commit to a second three-year term as FAF chairman. He has been at the helm of the FAF since 2016. His reappointment as FAF chairman comes at a time when banks have been lobbying Congress for an economic assessment of new accounting rules for reporting credit losses before the standard goes into effect in 2020 for public companies. The FAF says Noski will also continue to lead its Appointment Committee to elect the new FASB and GASB chairs, as those posts will be vacated in June 2020 by Russell Golden and David Vaudt, respectively, due to term limits.
Financial Performance Reporting Discussions Focus on Decision Usefulness
At its April 24 meeting, FASB continued discussions aimed at improving the decision usefulness of the income statement, part of its project to provide more transparency about how a company performed in a given period. FASB’s staff accountants have been conducting outreach with financial statement preparers and users to determine the operability and usefulness of alternatives the board plans to discuss. In addition, FASB’s staff has studied the location of that information within the financial statements.
Potential Changes to IFRS Would Subject Non-GAAP Measures to an Audit
Companies that rely on using alternative figures to present their financial results in press releases may have to put those numbers in the notes to IFRS financial statements if changes the IASB is considering take hold. Under the changes, such alternative figures, known as “non-GAAP measures,” will have to be put in the notes to the financial statements and reconciled to the nearest subtotal that is defined by IFRS. The decision means that those figures would be subject to being audited, an unprecedented change in financial reporting about items that have for decades generated heavy debate both overseas and in the United States. “We do not want to root these non-GAAP measures out; they will always be there, and they can even be useful,” IASB Chairman Hans Hoogervorst said during an April 17 podcast released by the board. They will “be centrally located in footnotes to the financial statements, so that investors know exactly where to find them,” he explained.