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February 15, 2012

FAF conducts post-implementation review of standards

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 repurchase agreements.

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”.

 

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