Project on Environmental Credits Still too Early?
At a recent meeting, many on FASB’s main advisory body said they have no direct experience with environmental credits as scoped by the board, a signal that rulemaking efforts might run into hurdles. The project deals with things like cap-and-trade programs, for example, that will likely become prevalent in the future, according to discussions by the Financial Accounting Standards Advisory Council (FASAC) on December 12. The figures involved are not yet material for most businesses. “Generally speaking—most of us, it’s limited, starting to grow, starting to get questions depending on whether you’re an investor, a practitioner, or a preparer but no one with extensive experience from our group,” retired AT&T controller Debra Dial said, summarizing a closed breakout session with a third of the FASAC. Two other breakout groups made similar remarks. The FASAC is a 35-member body of senior executives, including from some of the nation’s largest companies, who advise the board on its projects and other initiatives. FASB added the project in 2022 because there is no accounting standard for environmental credits and the board heard from its stakeholders that the topic will become prevalent in the future. The project will provide a full suite of rules.
Newly Rules Require Fuller Disclosure of Taxes Paid
FASB published new disclosure rules that require more transparency about income taxes companies pay in the United States and other countries—provisions that address about 30% of the overall net income of some companies that investors know little about. FASB issued the rules as Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, to increase the disclosure requirements around rate reconciliation information and certain types of income taxes companies are required to pay. For public companies, the standard is effective for annual periods beginning after December 15, 2024 (i.e. 2025 for calendar year-end filers), and a year later for private companies. Early adoption is permitted. The guidance was developed so that users of financial statements can get better information about how the operations, related tax risks, tax planning, and operational opportunities of companies affect their tax rates and prospects for future cash flows. Companies should start adoption efforts now, accounting professionals advised.
Five New Members Appointed to GASB’s Main Advisory Body
Five new members were appointed to GASB’s main advisory body, the board’s trustees announced on December 18. The five new Governmental Accounting Standards Advisory Council (GASAC) members will succeed that five who are leaving at year-end, according to the announcement, released by the Financial Accounting Foundation (FAF). They will start a two-year term on January 1, 2024, alongside incoming chair Rob Hamilton, who was appointed to succeed Elizabeth Pearce.
The new appointments are as follows:
- Robert Bland, endowed professor of local government, department of public administration, University of North Texas
- Chris Clarke, legislative post auditor, Kansas Legislative Division of Post Audit
- John Liszewski, commissioner of finance, City of Yonkers
- Michelle Watterworth, partner, Plante Moran, PLLC
- Robert Weber, vice president/senior analyst, Moody’s Investors Service.
In addition, 10 members were reappointed to GASAC, six to two-year terms and four to three-year terms.