-
FASB News
State Treasurers and Auditors Urge FASB to Reject Climate-Related Reporting Standards
- A group of state treasurers and auditors has sent a preemptive letter to FASB, urging it to reject any potential proposals to include climate-related reporting standards in U.S. GAAP. In the letter, more than two dozen state treasurers and auditors expressed strong concerns about the potential inclusion of sustainability or greenhouse gas (GHG) emissions reporting standards in GAAP. They argue that such rules would be inconsistent with core GAAP principles, such as materiality, sincerity, and prudence. Officials from 24 states, including Alabama, Alaska, Arizona, and Texas, signed the letter. “Congress is the only part of our government that has authority to require these rules, and it has wisely chosen not to do so,” they wrote on August 12. “FASB should not act unilaterally in this area.” These officials slammed the SEC’s climate-disclosure rules, the Task Force on Climate-related Financial Disclosures (TCFD) framework, and the International Sustainability Standards Board (ISSB) standards, stating that these frameworks prioritize a climate agenda over financial reporting needs. They warned that incorporating these standards would compromise the principles of sincerity and prudence, promoting a partisan agenda and requiring speculation about future climate-related laws. The letter comes as FASB is preparing to issue a proposal on reporting environmental credit programs, focusing on the accounting implications of these expenditures, such as whether they should be recognized as assets or expensed.
Financial Accounting Foundation Seeks New Trustees Amid Departures
- The Financial Accounting Foundation (FAF) is embarking on a search for new trustees as several members prepare to vacate their seats by year-end, the organization announced on August 13, 2024. Five FAF trustees, including Bruce Herring, Michael Rawlings, Timothy Ryan, Lawrence Salva, and Shundrawn Thomas, will step down from their positions on December 31, marking the end of their terms. The appointments committee is also seeking a new member to join the Governmental Accounting Standards Board (GASB) to replace Brian Caputo, whose term concludes on June 30, 2025. In addition, the committee is looking for a new member to join the Private Company Council (PCC) to replace Paul Hensley, whose term ended on June 19. FAF Executive Director John Auchincloss expressed optimism about filling the vacancies, stating, “We hope to be able to announce appointments for all of these searches before the end of this calendar year.” The announcement comes on the heels of the FAF’s 2023 annual report, “Standards that work from Main Street to Wall Street,” which was published in late May. The report provides an update on the organization’s strategic plan, approved by the board of trustees in November 2022. Auchincloss noted: “We continue to make progress on our objectives and will continue to share this information with stakeholders on an annual basis.”
IASB News
IASB Invites Public Input on Taxonomy Updates for Renewable Electricity Contracts
- The International Accounting Standards Board (IASB) is revamping its accounting taxonomy to accommodate new rules for renewable electricity contracts, and it is seeking feedback from the public. A taxonomy, essentially a system of classification, defines how financial information is tagged and structured in digital formats, making it easier for investors and regulators to analyze and compare data. The IASB released “IFRS Accounting Taxonomy 2024–Update 2” on August 15 to address the upcoming changes in disclosure requirements for contracts related to renewable electricity. The new rules, outlined in the “Exposure Draft for Contracts for Renewable Electricity,” aim to provide users of financial statements with a clearer understanding of how these contracts impact a company’s financial performance and cash flows. The board wants the public to weigh in by October 14 on whether the taxonomy upgrades would be adequate, appropriate, and clear. Stakeholders can submit comments to commentletters@ifrs.org.
