FASB News

FASB Reaches Milestone Decision to Finalize Proposed Chapter on Concept of Measurement

FASB has voted to finalize a proposal on the concept of measurement, a decision that will complete the conceptual framework for the first time. The full board affirmed proposed Statement of Financial Reporting Concepts 2023-ED700, “Concepts Statement 8, Conceptual Framework for Financial Reporting Chapter 6: Measurement,” with certain clarifications and discussions that the staff will put in place. “This completion of the measurement chapter will be the completion of our conceptual framework unless we decide to add another chapter, but I think as of now we’re completed,” Chair Richard Jones said. “And I would note that in the last two and a half years, five of the eight chapters will have been completed.” The final conceptual framework chapter was proposed in December 2023 to obtain public comment about the concept of measurement, describing–among other items–two different measurement systems and items for the board to consider when choosing between those two measurement systems. The framework is an in-house guide the board uses to develop U.S. Generally Accepted Accounting Principles (GAAP). The decision to finalize the chapter comes after decades of effort, according to discussions.

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Firms Starting to Field Questions on New Crypto Accounting Rules

Questions have started to trickle into firms about FASB’s new guidance for crypto assets, and the pace is expected to speed up, according to a panel discussion on May 2. “This is something that is becoming increasingly prevalent—more and more companies are holding crypto assets although it’s not extraordinarily prominent,” Mark LaMonte, partner, at Williams Marston LLC, told attendees at the 22nd Annual Financial Reporting Conference at Baruch College in New York. A notable issue one client raised surrounds presentation of the gains and losses on crypto assets being held, an area the rules don’t address, LaMonte said. “And the question that’s come to me  … is this operating income or not operating income? If you have a company that’s holding their excess cash in some type of investment vehicle on their commercial company, that is typically going to run through non -operating income, the gains and losses on those holdings,” he said. “The crypto assets are a little different in the sense that they are still considered an intangible asset.” LaMonte said that companies will have to make a judgmental decision when they think about how they present these holdings and the gains and losses on them in their financial statements, which is “kind of an interesting issue.”

IASB News

IASB to Develop Prioritization Framework

The International Accounting Standards Board (IASB) plans to develop a prioritization framework to address new topics that surface in the short term, according to April 25 discussions. The framework isn’t intended to be a “straight jacket” for the board, but an in-house tool that will require the use of judgment. The document will not be exposed for public comment, but the board needs to “make the bridge between what this means for us and what it means for stakeholders,” IASB Chair Andreas Barckow said. “There’s a huge disconnect between how our stakeholders think we work and how we think we work,” he said. “We just need to be mindful and probably try to bring people along and explain in the most transparent way that we can—how we build our work program; how we actually work.” The IASB develops International Financial Reporting Standards (IFRS) for about 150 jurisdictions worldwide. It is composed of 14 board members. The board will consult with trustees and other advisers about the framework, the discussions revealed. The framework will fill the gap between the period whereby the board issues a holistic agenda consultation to solicit public feedback, which is done every five years.