FASB News
Two GAAP Taxonomy Implementation Guides Proposed for Public Comment
FASB’s Extensible Business Reporting Language (XBRL) staff said companies can now weigh in on two implementation guides on financing receivables and credit loss disclosures and on taxonomy implementation notes. Specifically, FASB staff issued Proposed GAAP Taxonomy Implementation Guide (File 2021-950), Financing Receivable and Current Expected Credit Loss Disclosures, which demonstrates the modeling for disclosures related to financing receivables under FASB ASC Topic 310, Receivables, and ASC Topic 326, Credit Losses. The proposed examples “are not intended to encompass all of the potential modeling configurations or to dictate the appearance and structure of an entity’s extension taxonomy or disclosures in its financial statements,” but would “help users of the GAAP Taxonomy understand how the modeling for disclosures related to financing receivables is structured within the GAAP Taxonomy,” a text of the document explains. Companies should submit comments to xbrlguide@fasb.org by July 26.
New Rules Coming on Government Assistance, Variable Lease Payments
Companies will not have to wait long for new disclosure rules on government assistance and on variable lease payments, according to FASB Chair Richard Jones. Two final standards “that you will see shortly” will be issued on disclosing government assistance and on lessors accounting for certain leases with variable lease payments, Jones said at the June 24 Financial Accounting Standards Advisory Council (FASAC) meeting. In May, the FASB voted to issue a narrow package of government assistance disclosure rules to provide investors with an understanding of the terms and conditions, contingencies and longevity of government assistance agreements, the risks associated with those agreements, and how the agreements would affect financial results. These rules will take effect in 2022 for all companies. Similarly in April, the board voted to amend ASC Topic 842, Leases, to require sales-type leases where payments vary to be accounted for as operating leases The guidance would enable a transaction to be recognized as an operating lease if it is a sales-type lease with any variable payments that is not based on an index or rate and has a selling-loss at the start of the lease. The rules would also apply to direct-financing leases. These rules will take effect in 2022 for public companies and in 2023 for private companies.
IASB News
Proposal to Narrowly Amend Insurance Contracts Rules Coming in July
On June 22, 2021, the IASB voted to issue a proposal that would narrowly amend insurance contracts rules to fix a technical issue that would make companies’ reports appear mismatched. The proposal will amend IFRS 17, Insurance Contracts, to address one-time classification differences that may arise in the comparative information that insurers present when they initially apply both that standard and IFRS 9, Financial Instruments, according to the discussions. “I would normally never be pro or in support of changing a standard this close to the implementation date—to me it does create challenges,” IASB member Bruce Mackenzie said. “But I think this is one of those very unique situations where I think we are faced with a mismatch and we need to put something out there to help preparers get to the right answer.” The proposal will be issued in July with a 60-day comment period.
