FASB News
Securities Industry Asks for Three Extra Months to Study Proposal on Purchased Financial Assets
The Securities Industry and Financial Markets Association (SIFMA) asked FASB to extend the comment period on proposed accounting rules for purchased financial assets by three months, stressing the significance of the changes to member firms. The group asked that the period to opine on Proposed Accounting Standards Update (ASU) 2023-ED400, “Financial Instruments—Credit Losses (Topic 326): Purchased Financial Assets,” be extended from August 28 to November 15, as financial institutions need to focus on core work to meet pressing regulatory requirements this summer. The current deadline “coincides with a quarter-end reporting period for many of our members, who are generally all U.S. Securities and Exchange Commission filers subject to rigid reporting deadlines,” SIFMA’s Deputy General Counsel (Institutional) & Managing Director Kevin Zambrowicz wrote in a July 7, 2023, letter to the FASB. “As a result, most of our members will first be able to start focusing on their response halfway through or near the end of what is an already fairly brief comment period for a proposal of such complexity.” The proposal is also “potentially very significant to SIFMA member firms,” Zambrowicz said. “An extended comment period would provide more time for the industry to formulate a more comprehensive response by soliciting feedback from all our relevant stakeholders including our credit risk management, financial reporting and investor relations groups.”
IASB News
Accounting for Cryptocurrencies Might be Addressed in New Intangibles Project
The IASB is still not seeing prevalent use of cryptocurrencies on a global scale, but it will take another look at accounting rules on that topic as part of an intangibles project that is being researched, Chair Andreas Barckow said recently. Although there are many private investors in crypto assets, they do not use IFRS and the companies that use IFRS do not have material crypto balances, he told an IFRS Foundation conference on June 26. “One of the factors that we considered was how prevalent are cryptos, and how significant or material are balances in companies that use IFRS Accounting Standards?” said Barckow. “And the evidence last year was not enough—not widespread. That’s not to denounce that there are not jurisdictions in which it may be important—but not on a global scale,” he said. “So we are currently monitoring and obviously if there was an uptake and that situation was changing we would reconsider that decision and see what needs to done.” Last year, the IASB decided against adding a project on cryptocurrencies to its technical or research agendas, leaning on recommendations by the IFRS Interpretations Committee, which had tackled the topic in prior years. Specifically, in 2019, the committee issued an agenda decision which stated that cryptocurrencies, which are a subset of crypto assets, are intangible assets that fall under the scope of either International Accounting Standard (IAS) 2, Inventories or IAS 38, Intangible Assets.“ You may not like that answer but at least there is no gap, so that would be covered,” Barckow said.
GASB News
2023 Implementation Issues Arising Mainly from Three Accounting Standards
GASB has issued a new implementation guide to address questions stemming from the application of accounting standards on leases, subscription-based information technology arrangements, and changes and error corrections. Specifically, the board published Implementation Guide 2023-1, “Implementation Guidance Update—2023,” to answer mainly 11 questions that arose when governmental entities applied GASB Statement 87, Leases; Statement 96, Subscription-Based Information Technology Arrangements; and Statement 100, Accounting Changes and Error Corrections. The guide is part of GASB’s standing process to assist state and local governments in applying U.S. GAAP to the specific facts and circumstances that they encounter, the board said. It was developed from application issues raised during due process on GASB pronouncements; issues identified during the first stage of the post-implementation review of the leases standard; questions received throughout the year; and topics identified by the Governmental Accounting Standards Advisory Council (GASAC) and others. Most of the questions addressed in the guide stem from the lease accounting standard, which took effect for fiscal years beginning after June 15, 2021, the text of the guide reveals. Statement 87 introduced a single-model approach for reporting leases, eliminating the distinction between operating and capital leases. All agreements that meet the definition of a lease thus must be classified as finance leases.
