Should the EITF’s Purview be Broadened?
Some accounting professionals have suggested that FASB broaden the Emerging Issues Task Force’s (EITF) purview so that it operates more like the IFRS Interpretations Committee, the panel that works alongside the IASB to support the consistent application of IFRS standards. Accounting professionals said the IFRS Interpretations Committee has a clear process to assist companies that are seeking interpretations of IFRS Standards particularly when the company is “merely seeking a confirmatory answer rather than a formal change to current guidance,” according to the board’s June 24 agenda consultation document. They suggested that the board utilize the EITF to “publicly address interpretative questions in a consistent, timely, and transparent manner” and “establish a process that would provide timely interpretations of existing GAAP that would not require amendments to the Codification.” Such an interpretive process would allow for time-sensitive interpretations to be answered without having to go through the lengthier full due process in issuing new guidance, those floating the idea told the board. Moreover, the interpretations “should be directly linked to relevant areas of the Codification so they could easily be accessible by all stakeholders.” The suggestion about broadening the EITF’s purview was made with respect to how FASB could improve its standards setting process under chapter four in Invitation-to-Comment (ITC) 2021-004, “Agenda Consultation.” Comments on the ITC are due by September 22.
Proposal on Concepts for Notes to Financial Statements Revised
GASB said it is seeking comments on revisions to a proposed concepts statement that would establish the underlying principles for the notes to the financial statements. The board issued Exposure Draft (Revised) 3-34, “Communication Methods in General Purpose External Financial Reports That Contain Basic Financial Statements: Notes to Financial Statements an amendment of GASB Concepts Statement No. 3.” The proposal describes the hierarchy of methods of communicating information in general purpose external financial reports that contain basic financial statements and establishes disclosures in notes as the secondary communication method in that hierarchy. It also defines the criteria for disclosing information in notes to financial statements, such as the types of information disclosed, the types of information that are not appropriate, and the degree of importance that information should possess. Comments are due by October 15.
Extended Comment Period for ‘Game Changing’ Proposal on Disclosures Considered
The IASB will consider expanding the comment period of its broad proposal to revise disclosure rules for IFRS standards due to feedback from other national standards-setters that the project was a potential “game changer” and needed detailed research. IASB’s staff will recommend that the board extend its October 21 comment period for 290 days ending on January 12, 2022, according to a staff meeting summary. This past spring, the board published Exposure Draft (ED) 2021-3, “Disclosure Requirements in IFRS Standards—A Pilot Approach Proposed amendments to IFRS 13 and IAS 19,” with a 210-day comment period. At the Accounting Standards Advisory Forum (ASAF) meeting in June, the board heard feedback that the comment deadline was not long enough to gather “adequate evidence from fieldwork with preparers,” and “discuss that evidence with other stakeholders.” The IASB will likely agree to extend the deadline, a text of the staff paper signals. “We agree with ASAF members’ comments about the potential positive outcomes of the proposals in the Exposure Draft, and that it could be a game-changer for financial statement disclosures,” the text states. “However, we think the potential benefits can only be realized if the Board receives high quality, constructive feedback on the proposals. We also note that giving stakeholders sufficient time to fully consider the significant new thinking in the proposals is necessary in order to receive such feedback.”