Two Standards and Two Proposals Coming by Year-End, Plus a Peak into 2023
For the remainder of this year, FASB plans to publish narrow accounting standards related to rate reform and insurance contracts, as well as issue two proposals for public input, chair Richard Jones said on November 8. A final standard to facilitate the shift from the London Interbank Offered Rate (LIBOR), and another related to contracts insurers no longer own will soon be issued, he said at the Corporate Financial Reporting Insights Conference hosted by Financial Executives International in New York. Specifically, guidance will be published to defer the sunset date of Topic 848, “Reference Rate Reform,” from December 31, 2022, to December 31, 2024, a year after LIBOR’s new cessation date. Furthermore, a narrow rule will be issued to ease the hurdle of applying long-term insurance accounting rules to policies or businesses that insurers no longer own. The board voted to issue the rule in September.
Two Analysts Appointed to Small Public Company Advisory Panel
Two analysts have been appointed to the FASB’s Small Business Advisory Committee (SBAC), a panel focused on small public company matters, the board announced on November 9. Effective immediately, Jared Goodman, senior portfolio manager at Colorado Public Employees Retirement Association, and Steven Yang, fundamental analyst at Aquila Group of Funds, will join the SBAC. “I am pleased to welcome Jared Goodman and Steven Yang to the SBAC, both of whom bring additional investor perspectives to the SBAC,” FASB Chair Richard Jones said in a statement. “Their contributions to SBAC discussions will help the FASB better understand and serve the needs of smaller and medium-sized public companies and their investors.” The 12-member SBAC serves as a standing resource for the FASB. It meets twice yearly.
ISSB Announces Partnership Strategy to Leverage Use of Disclosure Rules
The International Sustainability Standards Board (ISSB) has developed a new “Partnership Framework” with more than 20 partner organizations, the board’s trustee body announced on November 8. The purpose of the five-year Partnership Framework “is to drive adoption of the globally implementable baseline that is truly inclusive in nature,” the IFRS Foundation said. Separately, the trustees of the IFRS Foundation also announced that the ISSB’s disclosure rules on climate will be incorporated into the environmental disclosure platform of CDP, a global not-for-profit organization that runs the world’s environmental disclosure system for companies, cities, states, and regions. CDP’s endorsement of the ISSB’s disclosure standards will boost the use of those rules with 18,700 companies, representing about half of global market capitalization, the announcement states. This will also accelerate the early adoption of the disclosure rules, “thereby providing investors with consistency of climate-related information they need sooner, and reducing the reporting burden on entities through an alignment of requirements.” By collecting this data, CDP will provide investors and other stakeholders with access to corporate environmental information that is consistent, comprehensive and comparable across geographies, the announcement also states. “It will also reduce the reporting burden on companies” and in turn, CDP will provide the IFRS Foundation “with access to data on disclosures made against the climate standard for monitoring uptake and implementation of the standards and pursuing their continuous improvement.”