ESG, Crypto, Intangibles, Government Assistance Added to Research Agenda

Companies got a hint at what could make it to the FASB’s technical agenda next year, as the board reset its research agenda to add six topics, including one that could merge international rules for government assistance into U.S. GAAP. A subset of cryptocurrencies, intangibles, and certain types of financial instruments with environmental, social, and governance (ESG)–linked features are among the other topics, the board said on December 15. Decisions on whether to add rulemaking projects will take place next year, including on how to scope its current efforts to disaggregate financial performance information. Furthermore, all 520 comment letters that were received on Invitation to Comment (ITC) 2021-004, “Agenda Consultation,” will be considered, according to the discussions. “I don’t want our stakeholders to say ‘you didn’t highlight my thing today’—don’t worry, you took the time to give us the advice—it doesn’t mean we’ll add a project or not, but we’ll certainly take it and do the evaluation,” FASB Vice Chair James Kroeker said. The board’s research agenda, set by Chair Richard Jones, should not be confused with its technical agenda, which contains defined projects that will result in new or amended accounting rules. Research is a preliminary step toward voting on technical agenda projects, which the board will do next year. “This is the start, we have a huge volume of information and input we’ve got and this is the kick-off,” Jones explained.

FASB Votes to Propose Two-Year Extension on Accounting Relief for LIBOR Removal

Temporary accounting relief guidance set to end next year to facilitate the removal of LIBOR will be extended two more years, U.S. accounting rulemakers said on December 15. FASB voted to propose extending the sunset date under Topic 848, Reference Rate Reform, from December 31, 2022 to December 31, 2024, for the shift from the London Interbank Offered Rate (LIBOR) when that rate and other rates expire. The change is to align the rate reform accounting standard with the expected cessation date of USD LIBOR, postponed by administrators earlier this year to June 30, 2023, a year after the current sunset date of the accounting rules. One month and three month tenors of USD LIBOR are the most widely used within the financial system, and to leave the current date would preclude a significant amount of contracts from applying the relief, a staff member explained to the board. If finalized, the proposed changes would be effective prospectively immediately upon issuance. The guidance is being proposed as regulators have been urging financial institutions to stay the course toward moving from LIBOR in an orderly manner to ensure they are adequately prepared when it expires. The proposal will be issued in the first quarter of 2022 with a 45-day comment period.

Private Company Council Looking to Broaden Outreach Next Year

The Private Company Council (PCC) plans to ratchet up its outreach to accounting committees next year, aiming to glean more private company input, according to a staff update on December 17. In October and November, senior FASB staff met with private company committees within the Institute of Management Accountants (IMA), Financial Executives International (FEI), and the Private Directors Association (PDA) of Houston to discuss how the PCC and the FASB can tap their input on standard-setting topics. Among topics addressed are future town halls and having interactive meetings as opposed to webcasts, FASB staff said. Next year, the PCC plans to hold its annual town hall meetings at the AICPA Engage conference, which will be held in Las Vegas in June 2022. A two-part PCC town hall will be held at 2:30 p.m. and at 4:15. p.m., staff said. The update comes at a time when the panel has come under criticism from a state society, which said its efforts to simplify certain aspects of private company accounting to date have not made a significant difference for smaller private companies.