Extra 290 Days for Feedback on Proposed Disclosure Rules
Users of IFRS standards will get an extra 290 days to evaluate proposed changes to disclosure rules, but the extension is unique and likely will not be repeated for other projects, the IASB said on July 21. The board’s vote means the comment period will be extended from October 21 to January 12, 2022, for Exposure Draft (ED) 2021-3, “Disclosure Requirements in IFRS Standards—A Pilot Approach Proposed amendments to IFRS 13 and IAS 19,” which was issued in March for public comment. “I’m concerned about the length of the comment period on this document. Having said that we don’t want to shoot ourselves in the foot and not get feedback on an important consultation,” IASB Vice Chair Sue Lloyd said. “But I think it’s going to be really important that we message people that this should not be seen as a new normal, because we are often criticized for timeliness and our due process handbook [has] set a time period which is designed to be adequate.” The decision comes after the board heard from national standards-setters at the June Accounting Standards Advisory Forum (ASAF) meeting that more time was needed to gather “adequate evidence from fieldwork with preparers,” and “discuss that evidence with other stakeholders.”
Proposed Omnibus of Accounting Clarifications Published
Accountants and financial statement users can now weigh in on a GASB proposal that aims to clarify technical issues that have cropped up when entities apply various existing accounting standards. The board published Proposed Statement 37-1, “Omnibus 20XX,” to amend accounting rules for specific issues related to financial guarantees, derivative instruments, leases, public-public and public-private partnerships (PPP), subscription-based information technology arrangements (SBITA), the transition from interbank offered rates, the Supplemental Nutrition Assistance Program (SNAP), nonmonetary transactions, pledges of future revenues, the focus of government-wide financial statements, and terminology. The proposal would improve consistency and enhance comparability, which would “improve the usefulness of information for users of state and local government financial statements,” according to a board statement. Comments are due by September 17.
Lease Accounting Rules for Sales-Type Leases with Variable Payments Amended
FASB has issued an accounting rule that requires sales-type leases with payments that vary to be recorded as operating leases, a change that enables companies to avoid booking a loss on profitable contracts. The change amends Topic 842, Leases, to require lessors to classify and account for a lease with variable payments as an operating lease if “the lease would have been classified as a sales-type lease or a direct financing lease” and the lessor “would have otherwise recognized a day-one loss.” The resulting financial reporting will more faithfully represent the economics underlying the lease and improve the usefulness of information provided to investors and other financial statement users, the board said. The amendments are effective for fiscal years beginning after December 15, 2021, for all entities, and interim periods within those fiscal years for public companies and interim periods within fiscal years beginning after December 15, 2022, for private companies and other entities.