FASB News

FASB Backpedals, Will Tailor International Accounting Rules on Government Grants for U.S. GAAP

FASB voted 6 to 1 to tailor an international accounting standard on government grants and incorporate it into U.S. GAAP—backpedaling on prior decisions that would have led down a different path of rules. Board member Christine Botosan fervently dissented. The board said that the lack of explicit rules in GAAP presents a compelling need to trim back accounting differences that have cropped up in the U.S. capital marketplace. Furthermore, the international accounting standard is already understood and used and would fix an issue that was left unaddressed for years, according to the discussions. “When we do outreach with investors we hear that frequently they do look at domestic and international companies, and so I do think it’s incumbent upon us when we have absence of GAAP that looking to international standards can be helpful,” FASB Chair Richard Jones said. “One thing I know is not to ‘do nothing,’ which is what we’ve done over and over again on this topic; we don’t make any progress,” he said, among other remarks. The board will leverage the accounting framework within International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, and revise it in targeted areas, according to the discussions. The standard will be improved in areas such as scope, recognition threshold, and cash flow statement presentation. Views were mixed about whether additional implementation guidance to illustrate some of the main principles of the requirements would be necessary.

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Big Four Chief Accountants, Senior Analysts Appointed to Emerging Issues Task Force.

The newly reconstituted Emerging Issues Task Force (EITF) will be composed of 11 members from various accounting and other firms, who will assist the FASB by providing timely guidance on narrow issues, the board announced on April 3. As part of its new operating procedures, the EITF will have the ability to manage its own agenda and accept potential agenda requests directly from the board’s external stakeholders. By majority vote of its members, the EITF will provide recommendations that FASB add projects to the board’s technical agenda and offer recommended solutions for the board’s consideration. FASB plans to host an EITF meeting in June. “During our recent agenda consultation, stakeholders suggested potential improvements to enhance the efficiency of the interpretive process and more effectively utilize the resources of this talented group of professionals,” FASB Chair Richard Jones said in a statement. “Based on that feedback, we revised the EITF’s membership makeup and operating procedures in ways aimed at achieving those objectives and maintaining the transparency that is critical to the group’s process.”

IASB News

Trustees Launch Search to Fill Coming Board Vacancies

The IFRS Foundation has launched a search to seat two new members on the International Accounting Standards Board (IASB) to succeed Ann Tarca and Jianqiao Lu, whose terms expire next year. Tarca and Lu, who represent the Asia-Oceania region, joined the board in 2017. Tarca’s term ends on June 30, 2025; Lu’s on August 31, 2025. The foundation said it is seeking candidates from the Asia-Oceania region who have a strong understanding of financial accounting and reporting and the broader global economic environment in which the IASB operates; intellectual rigor and balanced judgement; excellent strategic and analytical thinking skills combined with a pragmatic mindset and strong project management skills; strong oral and written communication skills, with the ability to represent the IASB effectively and to listen, consider and debate with others. Applications should be submitted by May 31, 2024, and interviews will start by this year’s third quarter. The IASB is composed of 14 members who develop and amend International Financial Reporting Standards (IFRS) for more than 140 jurisdictions worldwide. It is headquartered in London. Board members can only serve for a maximum of two five-year terms. No announcement has been made about a successor to board member Nick Anderson, whose term will also expire on August 31, 2025, but one is expected.