Staff Propose Updates to U.S. GAAP Taxonomy on Disclosing Income Statement Expenses
FASB staff members are seeking public input about how to tag proposed guidance for disclosing income statement expenses in the U.S. GAAP Taxonomy, the board announced on July 31. The taxonomy is a list of computer-readable tags in Extensible Business Reporting Language (XBRL) that allows companies to label the financial data in financial statements so that they can be filed electronically. Staff members are seeking input about whether to use: option 1—a line-item approach; or option 2—a dimensional approach to structure. Option 1 would provide specific line-item elements for each relevant expense caption and further disaggregation of inventory and manufacturing expense, according to release notes. Option 2 brings a dimensional structure with a member for each relevant expense caption and generic line-item elements for further disaggregation of inventory and manufacturing expense. Proposed Accounting Standards Update (ASU) 2023-ED500, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses, was issued by the FASB for public comment. The 58-page release notes package includes detailed illustrations of how the tagging would look. The taxonomy team is seeking comments by Oct. 30, including insights as to why an approach should be selected.
IASB Accounting Rules and ISSB Sustainability Disclosure Provisions Interconnect Well, Boards’ Vice Chairs Say
New disclosure rules on climate and sustainability matters borrowed from concepts used in IFRS, ensuring that both sets of rules mesh well together, according to a statement by the vice-chairs of the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB) on July 31. The ISSB’s standards are aimed at ensuring that “investors have the information that they need to understand how sustainability-related risks and opportunities affect a company, and how a company is responding to those risks and opportunities,” Vice Chair Sue Lloyd told a board webcast. “We were really careful to think about how the disclosures we ask for relate to what is set out in the accounting standards and what’s reported in the financial statements,” said Lloyd. “So we say that assumptions must be consistent but we go on to say to the extent that’s possible given the accounting standards that a company is applying— so we were really careful not to override in any way the accounting requirements,” she said. “But we do ask companies to explain any significant differences in the assumptions that they used—we were also really careful to think about how the reporting package would work well together.”
Toolkit Released to Help Firms Succeed in Changing Environment
The AICPA said that its Private Companies Practice Section (PCPS) has developed a comprehensive toolkit to assist accounting firms in business model transformation. The PCPS Strategy Planning Toolkit is designed to empower accounting firms of all sizes to create a “shared by all” vision for the future of their organizations. This vision can be understood by everyone in their organizations. The toolkit is free for a limited time only, the AICPA said. The PCPS Strategy Planning Toolkit provides accounting professionals with a framework to develop strategic plans to drive success. “The PCPS Strategic Planning Toolkit equips firm leaders with resources and support as they take the steps they need to embark on a transformative journey,” Lisa Simpson, AICPA vice president for firm services, said in a statement. “It offers a structured approach to strategic planning, enabling firms to define their vision, set priorities, and achieve their business objectives based on an understanding of the trends impacting the accounting profession now and those on the horizon. We’re excited to offer access to a proven strategic planning process that has been used by hundreds of firms and organizations in a new way, empowering leaders to design a strategy that sets them up for success in a fast-changing environment.”