Golden Outlines Board’s Standards Setting Plans Prior to Departure
FASB Chairman Russell Golden said the board will determine whether to finalize a proposal that grants one-year deferrals on revenue and lease accounting rules, two major standards private companies and nonprofits said are especially challenging to adopt during the coronavirus pandemic. The board plans to discuss the comment letters it received, Golden told the board’s trustees during a May 13 meeting. Those discussions will determine whether the proposal will be finalized and issued as GAAP. Golden also outlined the FASB’s near-term plans, prior to his departure. The board will meet in June to discuss its proposal on not-for-profit gifts in kind donations, the progress toward concluding its project on liabilities and equity, and the current implementation plans of its stakeholders on accounting for long-term insurance contracts, he said.
Amended Version of Rent Concessions Proposal Finalized
The IASB voted to amend and finalize a proposal that would enable lessees to avoid having to apply lease modification accounting rules to rent concessions made because of the novel coronavirus (COVID-19) crisis. The rules will be issued by the end of the month. The board said it would extend the conditions of the changes to capture COVID-19 related rent concessions made through June 30, 2021. The proposal had been narrowly drawn to apply only to rent concessions made in 2020. The proposal would also be amended to require a lessee applying the practical expedient to disclose the amount recognized in profit or loss to reflect changes in lease payments that arise from COVID-19–related rent concessions. Loosely put, a practical expedient allows a company to skip cumbersome accounting steps and apply a more practical approach that gets to the intention of the rule.
Staff Seeks Input on Technology Use During Crisis
The PCAOB staff has been studying the effect of technology and data on audit work for a number of years, and now the board also wants the public’s input on the use of technology in light of COVID-19.The PCAOB’s extra outreach effort comes as the board issued an update about where it stands on its research project related to data and technology. “We welcome the opportunity to hear from auditors and preparers about how they are using technology in the audit, in internal control over financial reporting, and in the preparation of the financial statements, as well as how the use of the tools is affected by the requirements in the PCAOB’s standards,” the update said. “We are also interested in hearing about how technology is being used in new or different ways in light of the challenges of the current environment in relation to COVID-19.” Interested parties should contact the staff at [email protected]org.