FASB News
Golden Says Next Wave of Questions on Revenue Recognition Is Coming
FASB Chairman Russell Golden has said the board is bracing for another wave of questions from companies on revenue recognition rules, as there has been more substantive regulatory focus on the changes a year after the adoption date for public companies. A batch of questions will also come from private companies, some of which have not yet adopted the rules, Golden told financial statement preparers on November 11 at Financial Executives International’s (FEI) Corporate Financial Reporting Insights Conference in New York. Recent studies reflect that approximately 30% of private companies still have not yet started implementing the rules, despite them having gone into effect earlier this year, Golden said. “So perhaps they are the companies that have little to change, but maybe those are [also] the companies that are waiting ’til the end of the year. So I do expect another wave of questions that would come would come in towards the end of this year and the beginning of next year,” he said. Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers,” took effect in 2018 for public companies and in 2019 for private companies.
FASB Adds Connor Group Partner to Special Task Force Unit
According to FASB Chairman Russell Golden, the board has appointed Aleks Zabreyko to its Emerging Issues Task Force (EITF), the panel that helps the board clarify technical and often-thorny accounting issues companies encounter. Zabreyko is a partner and strategic markets leader at Connor Group, an advisory firm that specializes in addressing complex technical accounting issues and financial transformation needs of high-growth companies. Zabreyko is the third addition to the task force in recent months; in June the board added Jeremy Perler, partner at Schilit Forensics; Matthew Schechter, formerly head of forensic accounting at Balyasny Asset Management; and Liesl Nebel, financial controller at Schoolhouse. The 12-member EITF assists FASB in improving financial reporting through the timely identification, discussion, and resolution of financial accounting issues. It is chaired by FASB member Susan Cosper. The next ETIF meeting will take place in March 2020.
PCAOB News
Brown Wants Renewed Conversation about Auditor’s Role in Information Outside Financial Statements
As public companies increasingly provide useful information outside the financial statements, PCAOB member Jay Brown says that it is time to have a serious discussion about the auditor’s role in providing some assurance on that information. Brown wants to know whether investors want auditors to play a bigger role on non-GAAP metrics and other information outside the standardized financial statements, as well as what level of assurance should be provided, among other things. “The PCAOB has played this moderator role before with respect to [audit] relevance,” Brown explained. “Concerns over the relevance of the audit report caused the PCAOB to convene the key constituencies, collect the relevant comments and feedback, and ultimately devise a set of revisions. The process wasn’t easy and took six years from concept release to final rule to complete, but produced a revised standard approved by the SEC that resulted in disclosure of critical audit matters or CAMs and firm tenure, among other things.” The SEC must approve the PCAOB’s standards before they become effective.
