The Financial Accounting Foundation (FAF)
plans to conduct post-implementation reviews on accounting
standards issued by the Financial Accounting Standards Board (FASB)
and the Governmental Accounting Standards Board (GASB).
The review aims to assist the FAF’s Board of
Trustees with their ongoing efforts to evaluate the effectiveness
of the standard-setting process for both the FASB and the GASB.
The standards selected for review cover
governing financial reporting for business combinations, operating
segments and government deposit and investment disclosures:
FASB Statement No. 141R, Business Combinations (FAS 141R)
– requires an acquiring organisation to recognise the assets
acquired, the liabilities assumed, and any non-controlling interest
in the acquired organisation at the acquisition date, measured at
their fair values as of that date, with limited exceptions;
FASB Statement No. 131, Disclosures about Segments of an
Enterprise and Related Information (FAS 131) – requires that
public companies report financial and descriptive information about
their reportable operating segments; and
GASB Statements No. 3, Deposits with Financial Institutions,
Investments (including Repurchase Agreements), and Reverse
Repurchase Agreements; and No. 40, Deposit and Investment
Risk Disclosures – require note disclosures about deposits and
investments, including related credit risks. In addition, Statement
3 also provides accounting guidance for repurchase and reverse
The FAF is coordinating with the International
Accounting Standards Board on its reviews of IFRS 8 (Operating
Segments) and IFRS 3 (Business Combinations).
FAF chairman John Brennan said the review aims
to assess “whether the intended financial reporting objectives
underlying these standards are being met, while also obtaining
stakeholder feedback on the application, usefulness, and
effectiveness of these standards set by our Boards”.