Multiple Amendments to Standards Represent Continuous Improvement

FASB does not find it frustrating to have to amend new accounting rules over and over, viewing it as part of the standards-setting process toward achieving the best accounting outcome, board members told an AICPA auditing task force. The board welcomes feedback—no matter how much—on complex standards as this helps improve practice, reduce cost and operations of a standard, according to October 6, 2020, discussions with the AICPA Auditing Standards Board’s Audit Issues Task Force. “It’s very hard to anticipate every issue and every industry and every type of transaction that’s out there,” FASB Chairman Richard Jones said. “We all believe standard-setting is an effort and continuous improvement,” he said. “So by its nature we’re going to get input on things we’ve done, and I think we’re very receptive to admit ‘hey we might have spent a lot of time on this, but we’re not saying it’s perfect,’ if there’s something that we can do that could improve it I think we’re very willing to consider.”


Joint Staff Guidance Published on Specialists in COVID-19 Environment

The staff of three accounting organizations— the AICPA, the International Ethics Standards Board for Accountants (IESBA), and the International Auditing and Assurance Standards Board (IAASB)—jointly issued guidance on using specialists during the COVID-19 pandemic. The guide defines a specialist as an individual or organization that has expertise—skills, knowledge, and experience—in a field other than accounting or auditing. The staff publication said that companies and accountants have been faced with unprecedented challenges because of the pandemic. They have had to adapt ways of working and supervising the work of others. And this may have resulted in requests for accountants in the private and public sectors alike to perform different types of activities and services than they are accustomed to and to work in ways that are different than before the crisis. “The publication provides guidance to assist professional accountants in business and in public practice determine when there might be a need to use the services of a specialist to assist in performing specific tasks and other professional activities within their employing organizations, and in serving their clients in the COVID-19 environment,” the IESBA said. “The publication also highlights relevant ethical considerations for accountants when thinking about using a specialist, as well as circumstances that indicate a need for a specialist during an audit of financial statements.”

Updated Guide Addresses Stablecoins

The AICPA issued updated its non-authoritative guidance related to digital assets. Digital assets are digital records, made using cryptography for verification and security purposes, on a distributed ledger. This virtual asset ecosystem is evolving rapidly, according to the working group. A “stablecoin,” according to a banking agency, is a type of cryptocurrency designed to have a stable value. Other types of cryptocurrencies frequently experience significant volatility. One type of stablecoin is backed by an asset such as a fiat currency. Stablecoins are used for a variety of applications, including enhanced payments on a broad scale, and demand for stablecoins has been increasing. “We considered many questions from leading practitioners and boiled it down to this document,” Diana Krupica, AICPA Lead Manager of Emerging Assurance Technologies, Assurance and Advisory Innovation, said in an October 8, 2020, statement. “We hope this new set of Q&As go a long way in providing support and guidance to financial statement preparers operating in the digital assets space.”

The guidance covers five key areas:

  • Meeting the definition of an investment company when engaging in digital asset activities
  • Accounting for digital assets held as an investment by an investment company
  • Recognition, measurement, and presentation of digital assets specific to broker-dealers
  • Considerations for crypto assets that require fair value measurement
  • Accounting for stablecoin holdings