New Rule for Profits Interest Awards will be Issued Early Next Year
FASB voted to finalize a narrow proposal that aims to provide an illustrative example and fact patterns for profits interest awards—agreeing to also add clarifications. The vote means that Proposed Accounting Standards Update (ASU) 2023-ED300, “Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest Award,” will be slightly revised and finalized to demonstrate whether a profits interest or similar award should be accounted for as stock compensation, according to the discussions. A final standard will be issued in the first quarter of 2024. “I think that the primary benefit here really is a reduction of application cost,” FASB Vice Chair James Kroeker said. “To me this was never about whether or not the accounting was better in one model or not. If it was, we should probably question why we continue to have that model,” he said. “It was really ‘am I in 718 or am I in the cash compensation model?’—both of those produce useful information but the real issue for private companies was application costs associated with figuring that out, that’s what this was about and so I think the benefit is a reduction of application cost and therefore I’m satisfied with moving forward.” The provisions will take effect for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, but can be applied earlier, the board agreed. Private companies will get an additional year to adopt. Companies will be able to apply the rules either prospectively or retrospectively with relevant disclosures.
Staff Propose Taxonomy Implementation Guide for Financial Statement Preparers
FASB staff are seeking feedback on proposed implementation guidance from SEC filers who prepare financial statements, according to an October 31 board alert. The taxonomy staff are seeking input on the proposed taxonomy guide, “Financial Statement Location Dimensions: A Guide for Preparers,” which is based on the proposed 2024 GAAP Financial Reporting Taxonomy. The 2024 taxonomy is pending SEC acceptance and is subject to change until published as final. The proposed guide explains the appropriate use of the financial statement location dimensions along with relevant extensible enumeration elements. These elements are used to disclose the specific locations within the financial statements where certain values have been reported when these values are not presented separately in the financial statements. The guide was developed solely for any party who is responsible for tagging financial statements in an SEC Extensible Business Reporting Language (XBRL) filing—not for users, according to the release notes text. Responses should be submitted by November 30.
Heavy Lineup of ESG Topics set for IFRS Foundation’s ‘Meet the Experts’ Conference
The IFRS Foundation’s joint annual “meet the experts” conference with PricewaterhouseCoopers LLP will take place on November 6–7 and is set to have a heavy focus on ESG-related matters, according to the agenda lineup. The morning segment on November 6 will focus on International Financial Reporting Standards (IFRSs), while the afternoon sessions and most of day two on November 7 are set to largely address environmental, social, and governance (ESG)-related topics, the agenda reveals. The two-day event is one of the largest and longest running financial reporting conferences in Europe—held annually to provide companies with insight about the latest accounting and regulatory developments in financial reporting. It will be held in a hybrid format to facilitate both remote access online and in-person attendance at the Leonardo Royal Hotel London St Paul’s, the foundation said. The conference enables attendees to meet with standards-setters, regulators, and industry professionals and offers “the necessary tools to keep informed about the latest regulatory and financial accounting developments.”